Open Text, Microsoft and the Top 17 Enterprise Software Stocks
Software is at the heart of the information age and is a huge driver of enterprises. Software stocks, under the technology sector, is set to grow even more as automation, and digitization continue in the workplace. These companies produce software widely used by companies and so they grow in tandem with other sectors which utilize their technology. Here are the top 17 enterprise software stocks right now:
Open Text (OTEX-T)
A Canadian company that develops and sells enterprise information management software. They pay a 1.6% dividend. They have high free cash flow and their fundamentals are looking good. They’ve been mentioned by numerous analysts as either a top pick or a buy.
It has been a laggard against other Canadian names. It is good for people who want to get rich slowly. He would be fine to buy it here.
Shopify Inc. (SHOP-T)
A company that is considered a Canadian unicorn. They provide a computer software platform for online stores and retail point-of-sale systems. The charts look good, and their addressable market is huge. A world leader in the e-commerce space.
His top pick in the past. He's owned this for a long time and never sold. It's a great story. It'll probably double in the next five years. A must-buy for Canadian investors. But it's fickle--its valuation can move around. Don't buy it now. Wait for a pullback to $1,500-1,600. He expects this to go…
Adobe Systems (ADBE-Q)
They provide software that is ubiquitous in the digital media/creative space. It is at a high valuation right now but it is a quality business. It is heavily used in corporate America and their cloud business is growing.
The broader tech sector has done well during the pandemic. Now at a point where the tech sector needs to be looked at in terms of companies that will continue to generate good revenues and other companies that will not. Digital files are growing and Adobe is part of this. The stock valuation is rich…
SalesForce.com Inc. (CRM-N)
An American cloud computing company that just released earnings. They’ve been consistently beating expectations. They were one off the first to offer software as a service and they’ve done very well. Their main business is for large companies and banks to interact with their clients.
They closed their Slack takeover today. They're challenging Microsoft for enterprise software supremacy. The Slack deal means that CRM will no longer by weighed down by arbitrage guys; there's a whole industry of arbitrage which short the buyer in these situations and he thinks that's why CRM stock has been flat since the Slack deal…
FireEye Inc (FEYE-Q)
An enterprise cybersecurity company that seeks to protect against cyber threats. They are a leader in security as a service and demand is growing.
Poster child when it comes to security as a service. Offer software instead of hardware, and the first to get in, so they have a lead. Instead, he owns Palo Alto and Splunk on the cybersecurity side. But it's on their shopping list, once markets settle down.
Autodesk Inc (ADSK-Q)
A 3D design software corporation that is used by architecture, engineering, media and connected industries. They are growing and acquiring companies so it should definitely be on your watchlist for a good entry point.
One of the best-run companies in the world, but doesn't get talked about. The software is enterprise-oriented, which he has used and thinks is very good.
An American cloud computing company. Their software is used to manage workflow in companies that provide services such as IT servicing. They’re growing rapidly and was mentioned as a Top Pick by David Burrows.
Buy. Great CEO and they have tons in the pipeline and lots of deals are doing well. Shares have come down, so buy now.
One of the world’s largest provider of database software. They’ve started changing their service into a subscription services and cloud based business. Their biggest client are financial institutions and are considered to not be a high risk trade.
Sold off a few weeks ago after its report, but today made new highs. They made the turn to higher margin businesses, so Oracle deserves a higher PE. Stay with it.
Red Hat Inc. (RHT-N)
An American open-source software products provider that is used in the enterprise community. IBM bought them recently. They help customers transition into the Cloud, and the demand for this type of service is expected to grow as companies transition into the cloud.
(A Top Pick Aug 29/18, Up 27%) Acquired by IBM. He started buying at $62 and was taken out at over $170. IBM needed power to get into the cloud space.
A giant in computing hardware and software. They pay a nice dividend that is expected to grow. They’re an absolute leader in software and the cloud who has been consistently growing. Their office program is moving to subscription base meaning good recurring revenue with high margins. A good stock to hold.
(A Top Pick May 13/21, Up 18.8%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with MSFT has achieved our $290 objective. To remain disciplined, we recommend covering 50% of the position at this time and trailing up the stop (from $200) to $265.
Tableau Software, Inc. (DATA-N)
They produce interactive data visualization products focused on business intelligence. They are pioneers in data analytics and they are moving from licensing to subscriptions and are getting rewarded for it.
Splunk Inc (SPLK-Q)
A software platform provider that uses a web-style interface to utilize big data. They’ve raised their 2020 revenue outlook and have returned about 21% in the last 2 months.
Citrix Systems (CTXS-Q)
They are the leaders in providing a secure digital workspace in the cloud. They’ve also become the preferred and most-used solution for enterprise file synchronization and sharing (EFSS).
(A Top Pick Jan 21/21, Down 8%)Stockchase Research Editor: Michael O'Reilly CTXS has triggered our stop at $118. We recommend covering the position at this time. We will look for better opportunities.
Cognizant Technology Solutions Corp. (CTSH-Q)
A IT services provider that helps companies implement technology. They started helping banks, insurance and healthcare generate more revenue using technology. An activist shareholder was brought in, and the company is focusing on value creation.
She sees a lot of good, long term, secular drivers. As technology permeates every business and every industry, these are the guys that come in and explain how a company can use technology. Historically, this was just on the expense side and how to get more efficient, but now use technology to generate revenue. This…
An on‑demand financial management and human capital management software vendor.They have brought in financial software that has helped them and analysts consider it a strong takeout target.
Cloud stocks have fallen out of fashion as investors rotate into reopening names, but suppose some cloud plays could be reopen stocks, too? Workday is one. It reported a good quarter today: subscription growth came in higher than expected, revenue growth accelerate and they raised full-year guidance. Management will expand their workforce by 20% this…
MongoDB, Inc. (MDB-Q)
A networking software supplier. Their main clients are financial services, government, healthcare, retail and telecom companies. The financial results for the fourth quarter and full year are expected to be announced on March 13.
A cloud company that does database management, beloved by app developers. It's soared 10x since its IPO less than four years ago, including a 173% run in 2020. This (and cloud stocks) peaked earlier this year at $428 in February then plunged to $238 in its May lows. Since then, it's roared back to $390…
Okta, Inc. (OKTA-Q)
A cloud software company that helps companies manage their employee passwords. Major S&P companies have embraced this company and their stock price has seen a nice return. There is still space to grow so it’s worth a look.
Today they reported higher than expected sales up 37% YOY though mixed guidance (say some but he disagrees) next quarter and full-year. One metric, remaining performance obligations are very good.