One cheap software firm to watch

British software companies are undervalued compared to their counterparts in the US, says Tom Bulford. Here, he picks one cheap small-cap company that has bags of potential for profit.

Today we turn our attention to the topic of software technology. I've been thinking about the software sector a lot recently, trying to determine whether this is a good place a find a few superstar penny shares.

The question that occurred to me is: are the shares of small software companies undervalued? One man who thinks they may be is Chris Underhill, founder and chief executive of marketing software provider smartFOCUS (LSE: STF).

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Tom worked as a fund manager in the City of London and in Hong Kong for over 20 years. As a director with Schroder Investment Management International he was responsible for £2 billion of foreign clients' money, and launched what became Argentina's largest mutual fund. Now working from his home in Oxfordshire, Tom Bulford helps private investors with his premium tipping newsletter, Red Hot Biotech Alert.