Information Technology is the fastest growing sector on the global stage. In Australia, however, it represents less than 2% of our market. As a result, its products are sourced from offshore. A rising Australian dollar makes these products more affordable for Australian businesses and could lead to an increase in volumes. Two companies to benefit from this activity would be Data #3 and Dicker Data. Both companies have distribution businesses whilst Data #3 has an additional services division that leverages off its relationships and the products it distributes. Dicker Data has recently followed in Data #3 footsteps with the exciting announcement that it will partner with Japanese company Hitachi Data Systems.
Both Data #3 and Dicker Data trade on reasonable multiples, pay good dividends, are currently experiencing strong earnings growth and operate in an industry with structural tailwinds. As a result, they are currently two of our core holdings.
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