7investing advisor Matthew Cochrane's July recommendation is a cloud-based enterprise software company helping corporations make the necessary digital transformation to thrive in today's world.
July 1, 2020
7investing advisor Matthew Cochrane’s recommendation this month is helping companies make the necessary digital transformation to thrive in today’s world. This company performs a necessary function, providing a real value to its customers, proven by its extremely high customer renewal and revenue retention rates.
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Hi, I’m Matthew Cochrane, lead advisor at 7investing, where we empower you to invest in your future by providing seven fully-researched stock recommendation reports every month.
My top stock pick this month is helping companies make the necessary digital transformation to thrive in today’s world. Public cloud and enterprise software spending was already rising as businesses sought to keep up with a rapidly changing economy. If anything, COVID-19 only accelerated this change, as businesses leaned into digital transformation trends that enabled remote work for employees and helped them transition to a higher mix of online sales.
This company performs a necessary function, providing a real value to its customers, proven by its extremely high customer renewal and revenue retention rates. That’s important, because these types of investments command steep valuations and, during an economic downturn, if they don’t perform a necessary function, they can easily be cut from IT spending budgets which will lead to decreased sales and a hit to the valuation.
Imagine being given the task of making a batch of cookies. Some ingredients might be boring but are absolutely essential to the process. If you don’t want your cookies to be a disaster you will need things like eggs, flour, baking soda, and salt. Other ingredients might be more fun, but are not nearly as essential to the process. For instance, take rainbow sprinkles. You can make a lot of great cookies without rainbow sprinkles, despite them being far more fun than other ingredients. When investing in SaaS stocks, go for the flour and eggs, not the rainbow sprinkles.
If you’re interested in my stock pick this month, visit 7investing.com. For just $49 per month you will gain access to all 7 of our stock recommendations each and every month.
I’m Matthew Cochrane, we’re 7investing, and we’re here to empower you to invest in your future.