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7investing Lead Advisor Matthew Cochrane’s top stock recommendation in September has one of the best customer retention records in enterprise software, keeping clients for years, if not decades, on its sticky software platforms.
A company’s database is its system of truth, a core system of record that holds everything from past transactions to business processes. Switching to another vendor is a risky and costly process. Consistently recognized as a leader in its field, this company sports one of the best customer retention records in enterprise software, making high switching costs a reality for its customers.
Transcript
You don’t have to get into the ground floor of the latest and hottest IPO to realize market-beating returns in your portfolio. In other words, sometimes boring beats sexy and exciting.
Hi, I’m Matthew Cochrane, lead advisor at 7investing. When investing, I like to look for companies with strong economic moats, or competitive advantages, preferably in industries with large market opportunities. When investing in individual companies, I don’t think there is anything more important than understanding a company’s moat.
My recommendation this month is an enterprise software company built for a specific industry. Its platform comes with extremely high switching costs as evidenced by the fact it rarely, if ever, loses customers to competition. This company is currently going through somewhat of a transition, muddying the waters of its financials and that makes valuing this company a bit difficult. But I believe this is a world class company concealed behind messy financial statements, giving investors an opportunity to pick up shares at an attractive price.
If you’re interested in my stock pick this month, visit 7investing.com.
I’m Matthew Cochrane, we’re 7investing, and we’re here to empower you to invest in your future.
