SalesForce.com Inc. (CRM)

Shopify vs. Salesforce He owns Shopify, though their PE ratio is really high. He uses Salesforce's product. Shopify has had a tremendous run, but he expects competition to hit them, offering a cheaper service. That said, Salesforce's moat is good--it isn't worth saving, say, $30 a month to learn a brand-new business software for your business. Salesforece has also been around longer and proven their staying power, whereas Shopify's stock price is based on future projections. Also, Shopify has a longer runway for growth than Salesforce.

They started offering software as a service very early and have done very well. There are high expectations built into the stock price and she would not buy at this level. It is very richly valued but it is on her watchlist when there is a broad pullback in the market.

$59.74 is his model price and it is at 61% above that. If you ever got a correction or bad news it would be worthy of consideration.

It is like any other cloud provider. What they do is very compelling. From a price point of view and what they add to a company, it is compelling. There is no tariff exposure. He feels like he missed the boat on this one.

The technical chart is exceptional. It has connectivity with client needs and provides a critical advantage. They have scale and can command a premium valuation to its competitors. They are constantly making their systems better. It has recurring revenue, which makes is superior to other tech holdings like the semi-conductor space. He has exited tech holdings in the portfolio, because the valuations have become too expensive compared to other sectors. He would take profit here.

A very smart company. He would prefer to buy it on a pullback. Cloud computing benefits and they are making smart acquisitions. They have loyal clients, he says.

Salesforce compared to Facebook and Google? Software company, trades at a high multiple, which is holding her back from buying. It’s more a momentum stock, any stumble and it will pull back. Not similar to Facebook or Google, which are advertising plays on the internet. Great company. Wait for pullback.

Banks and large companiy employees use Salesforce to interact with clients. They are a leader in this space. Likes the company. A growth name that will continue to grow due to demand for operational efficiency. Good leadership
now.

They just reported great earnings numbers. They sell application software (which makes up over 25% of his portfolio), which is like Facebook where the Cloud plays a big role and eventually leads to subscription revenue. Their guidance is calling for 25% growth. He has a target buy price of $155. Trading at 7.2 times forward revenue, it is a little expensive.

Valuation is too high. Watch and buy it during a dip. Forward PE is 60x.