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TSE:OTEX

Open Text (OTEX.TO)

35.84
+2.02 (5.97%)
as of Oct 13, 2026, 3:29:39 pm Market Open.
500 watching
0
BUY ON WEAKNESS
It is involved in enterprise information management software. They are a darling in the space. Users of their software are the largest users in the space. They picked up some interesting companies to expand cloud revenues. Yesterday, they bought a company out of Quebec that offers a great cross-selling opportunity. He has a target of $43, but is looking to buy in the low $30s.
COMMENT

Canadian tech? OTEX and SHOP would be good Canadian tech companies, along with CSU. All well situated for the cloud and e-commerce. He expects to see a market correction, so would wait for lower pricing.

TOP PICK

They reported Q3 earnings last night and they were strong results. They do enterprise content and information management through site and cloud based delivery. They have 10,000 companies and 97% of revenue comes from outside Canada. Over 20 years their ROE has averaged over 14% -- triple the TSX average. They are partnering with Amazon web services. Boring tech can be beautiful. Yield 1.86% (Analysts’ price target is $62.51)

BUY
On-premise and cloud based business tools that are not discretionary. It is a fairly innovative company and they grow by acquisition. The financial strength is good but there is a law suit regarding taxes. Longer term they should grow double digits. It has held up well in the selloff.
TOP PICK
A cloud IT services company. Very profitable as a rapid growth by acquisition story, spending $6.2 billion in the last 5-6 years. Good valuation and are operating in a growing market. They have 10,000 unique clients in 100 countries, so little concentration risk. (Analysts’ price target is $69.52)
PAST TOP PICK
(A Top Pick Nov 14/19, Up 4%) This does well during volatility. He owns a lot of it. This needs to hold above $60 or else it falls into the low-$50s. Trades at light volumes, so can be volatile.
BUY

He just bought a lot of this and likes tech, especially those that grow by acquiring like OTEX. It's been good at finding additional products to include in their packages. He likes this for the long-haul. Tech is a safe space in the coming 12-18 months. Canadian tech is cheaper than the U.S. FAANGs, though he owns Netflix and Disney.

BUY ON WEAKNESS
He sold it recently. They are a leader in enterprise resource planning. It reached his price target at $62 and he took profit. He would love to buy in again on weakness.
PAST TOP PICK
(A Top Pick Feb 11/19, Up 29%) They continue to grow by acquisition. He thinks they will do will well going forward. He owns it personally.
TOP PICK
They just bought Carbonite, which is a leading provider of cloud-based back-up. Their cloud business will continue to rise and grow even faster going forward. You will then see an earnings explosion if they grow quickly. They have owned it for 5 years and continues to buy. (Analysts’ price target is $68.69)
TOP PICK
He just bought it. He likes the tech space. OTEX is the biggest generator in information management done through software. Info analysis is key for companies to compete globally. OTEX is also in the cloud and supply-chain logistics. All tailwinds. Trades at a low 15x earnings. (Analysts’ price target is $63.57)
TOP PICK

He's owned this for a while. Any dip, he buys. It went up today during a wide market sell-off. They can expand organically with existing customers. They always do well during market volatility, and always a take-out candidate (and one day it will happen). (Analysts’ price target is $63.36)

PAST TOP PICK
(A Top Pick Jul 24/19, Up 8%) A big holding of his. They can generate more and more recurring revenue from assets they've purchased. They're also moving into the cloud. Their stable has become more stable, which has been a knock against OTEX in the past. The multiple on earnings has been very low in the past, but OTEX will close that gap as they report this year. They execute very well.
BUY ON WEAKNESS
A nice up channel, but we're now at the top. So, wait for a pullback to $50 or so to enter. A channel means buyers are willing to buy ever-rising prices, and you can pick your spot in a channel, particularly the midpoint between the top and bottom of that channel.
WEAK BUY
One of the challenges is that it has had a huge run – 35-40%. It is at the point now that it is acquiring bigger companies. It is a quality outfit.
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