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.
Over 95% recurring revenues. Global business and serial acquirer. 14.5% total compound return over 20 years, double the TSX and tech sector. It's boring tech but beautiful. (Analysts’ price target is $73.36)
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.
Phenomenal company that will do well for years to come, but trades at a huge multiple. Profits are small. Risk/reward is not there. He expects tech to lose its gold status over the next year, so this could fall 40%.
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.
Allan Tong’s Discover Picks If you’re long term, then pick the Adobe Stock as it trades below $600. The fundamentals remain not only sound, but strong. Adobe’s business is software by subscription and the cloud, and these will continue to steadily grow. The street agrees with 17 buys, three holds and a $721.83 price target…
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.
Slack is a tailwind, but so is their software allowing people to work remotely during this labour shortage. Even as the pandemic has subsided, many people don't want to return to the office. CRM offers labour flexibility.
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.
Tim Collins, a technical analysts, is bullish cloud stocks. It's recently pulled back from recent highs in a "flag pattern" or "continuation pattern" which means that consolidating, a stock will resume its march higher. Before this consolidation happened, NOW was nicely moving higher, then POW in August an explosion to the upside. Recently it's declined…
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.
It's very well run, but there's nothing exciting here. Oracle is doing quite well in the cloud, but no one is talking about it. He prefers Dell.
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.
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.
(A Top Pick Sep 21/20, Down 12%) He bought a 1/3 position here at $155, and he'll add at 140 and 125. Growing like a weed despite its scale. Uses are infinite, very focused on visualizing and analyzing machine data. Management always has profitability in mind. Valuation continues to be reasonable. Growth trajectory, but almost…
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.
It reports Tuesday. Their last quarter was good. If shares got hammered Monday and Tuesday, maybe you can buy this lower on Wednesday.
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.
Technical analysis: The chart shows it's poised to catch up with the sector and show upwards performance on its own. Also see his thoughts on XLK and the 10-year yield this day.
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.
Cyber Security for businesses. There is a big focus on workplace technology stocks. Businesses are adapting and IT needs to adapt. He thinks there will be another big earnings growth ahead of them over the next couple of years as they bolt on more products to their platform. (Analysts’ price target is $297.08)