Since the glory days of the mobile phone invention and especially GSM technology, Helsinki has been known as the stock exchange where Nokia trades.
Nokia peaked on June 19th 2000 at €61.88 (market cap €250 billion; 2020 market cap €21 billion) during the tech bubble of 2000. Since then there have been many interesting offspring from the Nokia miracle.
One of these children is Digia. Here at The Armchair Trader, we feel that it represents an interesting opportunity for the savvy self-directed investor.
Who are Digia?
The history of Digia has its roots in a company called SysOpen Plc, which was founded in 1990, and in Digia Ltd, founded in 1997. These companies merged in 2005 to form SysOpen Digia plc.
In the early years of the company, SysOpen Digia acquired Yomi Software Ltd (2005), Samstock Ltd (2006) and Sentera Plc (2006).
SysOpen Digia changed its name to Digia in 2008. Major changes took place in 2011 and 2012, when our then-great partner, Nokia, renewed its business strategy. In 2012, Digia acquired Nokia’s Qt business.
The company has operated in its current incarnation since the spring of 2016. Digia was demerged on 1 May 2016 so that all assets, liabilities and responsibilities related to its Qt business were transferred to a new company established in the demerger called Qt Group Plc.
Digia revised its strategy and has been focused on Digitalization since 2016.
The company has been growing fast. Turnover has built rapidly at over 15% annually. Even better, operating profit is increasing and operating margins are improving too – up 6.6% in January to September 2019.
Digia has a market cap of €122 million and is followed by three small analyst houses in Finland.
The stock took off from its range of €2.5-3 during the spring of 2019 and has not looked back since. Closing on January 21st at €4.61, the share price has a 52 week range of €2.53-4.9. Full year results for 2019 are expected on February 7th.