SalesForce.com Inc. (CRM)

Users like their services. Doing $2.6 billion in Cloud and support revenue. Their subscription model is really driving this. There's debate about them reaching saturation. They just bought RealSoft. which he was going to buy. Salesforce's ability to work with other apps will lead them to continue to grow. It's on his radar.

This company tracks customer contacts. It is at or near all-time highs and is at 62 times earnings. He likes it is going to the cloud, but they will require 20% compound annual sales growth to defend it and he does not think they are there.

He thinks this tech stock is one for your portfolio, but at lower prices. A further retracement would be a good time to nibble at this one.

In the market we are in, there are several key multiyear themes at play. In a bull market, you tend to have a number of industries that have some structural shift taking place that benefit certain industries for a long period of time. This company is right in the middle of one of them. It is Cloud-based software. A really unique area, because when you are getting subscribers and new customers, recurring revenue just keeps on going. Expensive at about 80X this year’s earnings. However, it is growing at 30% a year and estimates are constantly being revised higher. He likes the software as a service and the Cloud-based software sector. The best companies always trade at high valuations.

A company he has not recommended because it is very expensive with a very high beta, and his clients can’t stomach that kind of risk. Prefers cheaper names in this sector.

He doesn’t love this one. As a successful software business, it has gotten very high valuations. As a value investor, he doesn’t see why he would pay 40 or 50 times earnings. Prefers something like Google (GOOGL-Q) over this.

A great company. The stock hasn’t gone up a lot, and is still trading at a very high valuation level. You are paying for a lot of good things to happen. Today, when there are so many good companies that are still growing and have pretty powerful brands, they are more attractive from a valuation standpoint, and those are the things that he is looking at. You are taking more risk in a name like this that is trading at a 70X earnings multiple.

(A Top Pick March 23/15. Up 6.86%.) Still thinks this is an excellent company and he toyed with the idea of buying more. However, at the beginning of the year everything got thrown out with the bathwater. A very high valuation stock. Thinks the market is starting to award deep value over growth. Currently he still has a very small holding.

(A Top Pick Feb11/15. Up 4.93%.) Unfortunately, this has become a bit of an ATM stock, where people have been coming out a bit. Has been an investor favourite for many years. Unfortunately, technology has been under pressure lately for the last 6-7 weeks, so he had to lighten up.

This is one of the best cyclical technology stocks. They are rolling out `wave` and growing quickly in the 25-30% range for cash flow. It still has upside to come. This is early stage to a growth roll out.

Basically a customer relationship management tool. It allows you to put in customers names for mass mailings, etc. Their growth is phenomenal at 20%-25% per annum. A lot of that is flowing to the bottom line. Bottom line performance is growing at 25%-35%. Relatively small as a company, so it has a long ways to go.

A cloud-based software company and used for customer relationship management. From a sector strength standpoint, it is behaving extremely well. Very, very strong momentum in their growth. Quarter revenues have been growing in the 30% range. An expensive company so you have to understand you are buying momentum. If you believe that corporations are starting to loosen up a little bit on spending, there is growth coming. You are paying 160X next years earnings. With even a slight stumble, it would have a very tough time.

(Top Pick March 11/11. Up 7.17%.) This was a choice based on seasonality.