Stealth Mode Standouts: 3 Under-the-Radar Tech Stocks Set to Soar
Tech stocks continue to outperform. The Nasdaq index is up nearly 10% this year compared to an 8% increase in the benchmark S&P 500 index and a 3% gain in the blue-chip Dow Jones Industrial Average. However, the rally among technology stocks continues to be uneven. While the Magnificent Seven and stocks of microchip companies are performing well, many other tech stocks are lagging the overall performance. This can be due to poor earnings and also a lack of investor awareness. Many technology stocks are not as familiar to investors as the mega-cap names that receive constant spotlights in the business press. This is especially true among individual retail investors. However, there are some great long-term buys available among less popular technology stocks. Here are stealth mode standouts: three under-the-radar tech stocks set to soar.
Under-the-Radar Tech Stocks: Intuit (INTU)
Its stock hasn’t set the world on fire lately, up 8% on the year and matching the gain in the S&P 500 index. However, shares of Intuit (NASDAQ:INTU) could take off as the company’s growth accelerates in coming months. The software company that specializes in accounting products such as TurboTax, Credit Karma and QuickBooks recently announced better-than-expected financial results for what was its fiscal second quarter.
Intuit reported earnings per share (EPS) of $2.63, which topped Wall Street forecasts of $2.30. Revenue totaled $3.40 billion, up 11% from a year earlier, and in line with analyst estimates. Sales in the company’s small business and self-employed segment, which is its bread-and-butter, rose 18% from a year ago, while sales in its consumer segment gained 5% year-over-year. The company expects sales to rise another 11% in the current quarter.
While INTU stock has been a slow mover in recent months, it is still up 61% over the last 12 months and has increased 152% through five years, making it one of those under-the-radar tech stocks to check out.
Constellation Software (CSU)
A lot of investors have likely never heard about Constellation Software (OTC:CNSWF), the Canadian technology firm that is often referred to as a mini Berkshire Hathaway (NYSE:BRK-A,NYSE:BRK-B). Constellation Software is a holding company that buys software companies and then holds them for the long-term under independent management.
Constellation has acquired more than 500 businesses since being founded in 1995. One of its most recent acquisitions was Winklevoss Technologies, or “WinTech,” the Connecticut-based software company founded in 1987 by Howard Winklevoss, an actuary who is a leader in benefits management and pension plans, and who’s also the father of twin crypto billionaires Cameron and Tyler Winklevoss.
Constellation Software is known for having a fortress balance sheet and steadily increasing revenue through its many acquisitions. The stock has been an amazing compounder for shareholders, having gained 62% in the last 12 months and 243% in the past five years. Since going public in 2006, the stock has risen more than 20,000%. Like Berkshire Hathaway, Constellation Software has never split its stock.
Cisco Systems (CSCO)
Digital communications firm Cisco Systems (NASDAQ:CSCO) has been a chronic underperformer. But it looks like the company and stock might finally turn around after moving in fits and starts for years. Recently, Cisco announced plans to cut 5% of its workforce, or about 4,250 jobs. The job cuts were announced as Cisco reported strong fiscal second-quarter financial results.
Cisco announced EPS of 87 cents versus 84 cents that was expected on Wall Street. Revenue also beat, coming in at $12.79 billion compared to $12.71 billion that was estimated among analysts. Yet despite the jobs cuts and earnings beat, CSCO stock has slumped due to weak forward guidance. Another issue is the fact that Cisco has not yet closed its $28 billion acquisition of security software firm Splunk (NASDAQ:SPLK).
However, Cisco plans to close the Splunk deal by summer and the job cuts should help control costs moving forward. These steps should help Cisco’s financial results and stock. Year-to-date, CSCO stock is down 2%. Over the last 12 months, the share price has increased a slight 1%. Not great, but there’s room for improvement.
On the date of publication, Joel Baglole held a long position in CNSFW. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
