Stock: Appen Limited
Appen was added to the ASX 200 in June 2018 and displays strong performance in both LT technical and revenue & earnings growth.
Despite this, we have not added APX to our model portfolio, or issued a buy signal, because of its market position.
We are looking for companies with a competitive advantage that enables them to defend market share against competitors, without compromising profit margins.
APX competes in a crowded, technology-driven market against a vast number of competitors (over 17,500 Content Relevance and Language Resources providers, according to Jacob Simonsen at Lincoln) and is vulnerable to technology advances by competitors that could make it difficult for APX to defend its market share.