Softcat (SCT) £11.53
Gain to date: 20.2%
Original entry point: Buy at 959.5p, 1 August 2019

Being rated as a Covid-19 winner did wonders for Softcat’s (SCT) share price through most of 2020, breaking through £14 in August.

Certainly mass work-from-home would have done the software reseller no harm at all, but the previous wind in the stock’s sails has died down as the easing of pandemic lockdown restrictions nears, possibly prompting investors to take some profits, depressing the share price and bringing the 2021 price to earnings multiple back to 30.

Even so, a 20% paper profit remains impressive in the 15 months since our original Great Idea pitch.

Judging by the company’s latest update there is little to trouble expectations of more gains to come. Softcat said earlier this month that first-quarter revenue, gross profit and operating profit had all tracked higher and that demand had continued to emerge from both public organisations and the commercial enterprise sectors.

While the quarterly update was typically figure-free and brief, the company also said that its cash generation for the three months through October had remained in line with normal trends.

SHARES SAYS: This resilience is encouraging, and investors should take advantage of the recent share price pullback to buy more stock. Softcat is still a buy for the longer-term.

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