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.
A company tech company. A good serial acquirer in Europe and North America. He's waiting for a pullback, say to $45. (Bruce Campbell (1))
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.
480 times PE. Sales growth grew 45% in a recent report. He thinks there are good opportunities for overall growth. (Robert McWhirter)
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.
It's in the digital media/creative space. It's reasonably priced now. His price target is the current $250, so he'd buy at $210-220. (Kim Bolton)
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. (Kim Bolton)
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 did some acquisitions to catch up with Dassault Systems and PTC. Price target of $150. Entry point in the low-$130's. (Kim Bolton)
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.
Software as a service. It is the strongest sector, period – in the last two years. It makes software that is used to manage workflow such as for companies that provide IT servicing. It is growing rapidly. 35% year over year. They have running room in front of them. (Analysts’ price target is $233.32) (David…
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.
(A Top Pick Nov 01/18, Up 2%) Just sold it. They got bearish and wanted to raise cash. It is a trading stock and trading close to its target now. (Keith Richards)
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 Jul 09/18, Up 31%) IBM bought them, so he hopes IBM lets them flourish. He took a healthy profit. (Kim Bolton)
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.
This company has made a great transition from selling a physical item to the software as a service. They also have other arms with high growth. Fortress balance sheet with high growth. (Chris Stuchberry)
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.
135.67 Big data hardware is in the cloud and data analytics. Tableau is involved in the latter--they were pioneers in this space and are now leaders. They've moved from licensing into subscriptions early and it's paid off very well. (Kim Bolton)
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.
What do you do with a price target? Price target of $130.65. Once he gets within 5% of a target, he looks to sell some (33-50%) shares. and even more if a stock price surpasses that target. (Kim Bolton)
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 Sept 11/09. Up 95%.) Owns the “Go To Meeting” brand, which is used by enterprises to manage remote networking and meetings. (David Burrows)
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, Down 13%) A decline of this size is actually not bad (relative to others) – making it a stock he will continue to hold. Bringing in financial software has helped the company and he thinks it could be a strong takeout target. (Kim Bolton)
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.
Sold it in January to buy more ETFs. This has had a fantastic run but is not expensive. He has a $107 price target, just 10% higher than today's close. (Kim Bolton)
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.
If they do this right, Okta can get rid of multiple passwords that every computer user has. I.T. departments of major S&P companies have embraced this company. It has seen an 76% increase in customer subscriptions and a great 67% return YTD. (Analysts price target $46.57) (Mike S. Newton, CIM FCSI)