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.
Geared to the enterprise, not the consumer. Helps digitalize processes in the supply chain, through analytics and AI. Well diversified client base, recurring revenues. Target of US$52.05. Can start to nibble here. Consistent double-digit growth rate. Buy it with a $30 handle on it.
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.
Pandemic has helped all the e-commerce names. But valuation worries him, at 500x forward earnings. Sales growth will be strong. Paying a premium for this name.
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.
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.
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.
They are geared towards the industrial machinery side of tech. Their earnings reported last night showed a lowering in their guidance. This has resulted in a sizable pullback in share price today.
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.
They developed a cloud computing platform to help companies with digital operations. Founded in 2003, it IPO's in 2012 and has since acquired several good companies. He particularly likes that 90% of their revenue is recurring. This reduces the risk. Although a little pricey at 15 times revenues. He would look to buy around $325.…
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.
His model price is $86 or a 46% upside. They are now involved with Tiktok. We have to wait to hear from ORCL-N on how this is going to work. (Analysts’ price target is $62.31)
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.
MSFT vs. NVDA Both have been great. Likes them both. NVDA has one of the best graphics processors and they've been riding the trend, which isn't slowing down. A good one if you can handle the volatility of the semiconductor processing space. Good if you want growth in this depressed GDP era. MSFT is a…
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.
Allan Tong’s Discover Picks Despite its unfortunate name, Splunk is an American data analytics company worth considering. Clients that use their platform include Intel, Comcast and Coca-Cola. It IPO'd in 2012 as an early big-data tech stock and has risen in this space since. Their data has moved to the cloud, and their cybersecurity segment…
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).
Dropbox It'll continue to benefit from work from home. Cloud computing will remain important. It'll be more and more important for them to upsell higher services to their customers. He prefers, likes and uses (in his office) CTXS which offers more office functionality than Dropbox currently. CTXS is also in the cloud business. Dropbox is…
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.
(A Top Pick Aug 29/18, Up 27%) Software to service company, with human resources and financial reporting. Have become quite a darling. Jumped on the whole subscription idea, recurring revenue. Took profit at $193. Top line and bottom line great at last reporting. Would buy back in the $170s.
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.
He does not own it today. There is a lot of competition in the space of helping companies upgrade software for data management. They decided to stay out as a result.
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.
What he calls one of 15 Red Hot stocks: unstoppable growth stocks with a sky-high valuation (30-100x sales, not earnings) With Crowdstrike, is a cloud cybersecurity play. Offers only 30% revenue growth, though trades at 30x sales, which is insane, but what can he say? Danger of a downside hit at these levels.