They're usually small companies, which are largely ignored by the big money investors…
Yet they demonstrate huge growth potential, generate consistent profits and in many cases, pay attractive income.
I call them “Below-the-Radar” stocks.
And when investors finally take notice of them, their share prices can soar 50%, 100%, even 200% in a short period.
Here's one below-the-radar stock worth adding to your investment portfolio...
Everywhere you look, things are going up…
• Silver UP +45%...
• Bitcoin UP 670%...
• Tech stocks like Tesla…UP 1,155%..
• Copper UP 76%…
• SA’s top 10 Miners UP over 120% …
And yet, not 6 months ago……the South African economy was the weakest it has ever been in 90 years.
If I’m correct, the rapidly rising markets we’re seeing right now are the start of a much bigger trend.
The tiny SA company tapping into the “Future of Payments”
SA-based Synthesis is an innovative software development and consulting company. It’s owned by JSE listed small cap Capital Appreciation (JSE: CTA).
In collaboration with Nedbank, Synthesis developed and launched a payment method called “Halo”.
Halo enables secure contactless card payment acceptance on any Android device.
The technology is termed ‘Tap on Phone’ due to the way in which a payment card is tapped on a mobile device or phone.
You can think of ‘Tap on Phone’ as a substitute for traditional POS terminals – just without the extra hardware. Only a mobile device is required.
But don’t confuse this payment system with mobile wallets (like Samsung, Google, Garmin or Apple Pay) that have been around for a few years.
These wallets make use of Host Card Emulation (HCE) where the phone essentially acts as a contactless card and is used by a customer to ‘make’ a payment.
Halo on the other hand, is the inverse technology of a mobile wallet making it simple for small and medium business owners to accept a card payment.
Tap on Phone will play a significant role in the future of mobile payments due to its speed, convenience and enhanced security.
The technology has immense potential for small and micro merchants as it allows them to accept card payments and enter the digital payment ecosystem without incurring any upfront costs for expensive POS terminals.
Additionally, this technology reduces the reliance on cash and reduces any physical contact during the payment process – which is important especially in today’s pandemic plagued world.
Halo will also boost financial inclusion for small businesses and micro-merchants. Just think about the benefit to informal traders who couldn’t previously accept debit or credit cards simply because they didn’t have POS terminals.
With Halo, they can easily and securely accept payments that are verified online in real-time.
Lastly, Synthesis has unique advantage because the company is one of only a handful of Mastercard and Visa certified providers of this capability globally, and the only one in Africa!
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CTA is growing, profitable and an attractive income payer!
When CTA last reported financial results, Synthesis increased revenue by 13.8%.
Overall, revenue grew 15%, headline earnings per share rose 29.7% and cash generated from operations tripled…And this was all during a Pandemic!
The company even grew its dividend by over 11% in a time when many companies cut dividends.
Right now, CTA has a R488 million cash war chest, which can fund new opportunities in the fast-growing fintech sector.
In short, owning this revolutionary payment technology could help transform Capital Appreciation into a SA fintech giant. And as contactless becomes the future of payments, CTA could be your path to amazing profits.
See you next week.
Managing Editor, The South African Investor