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.
DSG-T vs. OTEX-T which to sell to raise cash? DSG-T, if you own it, you would have done very well, but the fair market value is 78% lower than where it is at now. There is a lot of momentum behind it but not a lot of value. OTEX-T is trading right at its fair…
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.
It has done very well. It is well positioned and will grow its business. It reflects the trend to e commerce. If it has grown to a lot of your portfolio you should take some off the table. MSFT-Q would allow you to diversify. It is well positioned.
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.
BIGC-Q He prefers Adobe, a stock that people don't talk about anymore. Buy this even partially for now.
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.
He follows it, but the valuation doesn't make sense. Valuations may not matter in the short term, but at the end of the day they do. They need to generate cashflow earnings to justify the valuation, or the valuation needs to come down. Great company, but too expensive.
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.
Cloud stocks are recovering after dipping in the wake of vaccine announcements last month. When SN reported in late October the stock got slammed though it has performed well YTD. The outlook into 2021 looks good.
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.
Has always been a bit of a sleeper, but doing all the right things. Legacy hardware side is a ball and chain. He has a price target of $69, so it's getting close. In a correction, look to pick it up around $56, add to it at 50, and if you're lucky around 45.
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. APPL Apple is a consumer products company, whereas MSFT is an enterprise company. Both trade at similar multiples. Great balance sheets, buy back shares, increase dividends. Apple relies on growing iPhone and 5G. Will continue to do well. The iCar is an expensive proposition. MSFT has really benefited from cloud infrastructure growth. Better…
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.
It sold off in today's Pfizer vaccine really. Be patient, don't wait. He strongly believes in it. This could reach $180.
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 cloud stock that automates the back office. It's tough to figure out because its software that automates human resources and finance is too complex for most American investors. But it's a well-run company. It reports Thursday.
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.