Advertisement
U.S. Markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0797
    +0.0003 (+0.0324%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • Vix

    13.01
    0.00 (0.00%)
     
  • GBP/USD

    1.2625
    +0.0002 (+0.0189%)
     
  • USD/JPY

    151.3030
    -0.0690 (-0.0456%)
     
  • BTC-USD

    70,028.99
    -438.30 (-0.62%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

RBC Following Latest Selloff In Software Stocks: Focus On Disruptors

RBC Capital Markets recently issued a report on the software industry following the most recent decline within the software index. Matthew Hedberg and Ross MacMillian highlighted ServiceNow Inc (NYSE: NOW), salesforce.com, inc. (NYSE: CRM) and Proofpoint Inc. (NASDAQ: PFPT) as companies that "have sold off but could be big outperformers on a two-three year view."

The Sector

RBC Capital markets noted that the decline in stock values within the software industry followed a generally well-performing earnings season, with many software firms providing in-line to better-than-expected earnings announcements. However, the analysts pointed out that one weakness for a majority of the firms that announced earnings was a slowing profit margin, which could reflect macroeconomic and currency headwinds.

With the recent decline in share values, analysts believe that this may be a sign of decreased earnings forecasts for 2016, as companies attempt to maintain profitability and achieve top-line growth.

Related Link: Suhail Capital Calls Ultimate Software "Most No Brainer Short" In Sector

A Few Good Names

RBC went on to recommend two "safe" stocks based on the strength of their fundamentals: Microsoft Corporation (NASDAQ: MSFT) and Oracle Corporation (NYSE: ORCL). With strong brand names, viable cash flow, and strong product demand, RBC sees these two companies as key players that can perform well even in challenging market conditions.

At The Time Of This Writing...

  • ServiceNow was seen trading down 0.19 percent on the day at $47.05.
  • Salesforce.com was up 4.01 percent on the day, trading at $56.22.
  • Proofpoint was also in the green, trading at $37.90 and up 3.55 percent on the day.
  • Microsoft was seen slightly down on the day at $49.06 (down 0.70 percent).
  • Oracle was trading at $34.75, down 2.42 percent.
  • Image Credit: Public Domain

    Latest Ratings for NOW

    Jan 2016

    Mizuho Securities

    Downgrades

    Buy

    Neutral

    Dec 2015

    Goldman Sachs

    Initiates Coverage on

    Neutral

    Nov 2015

    Pacific Crest

    Maintains

    Overweight

    View More Analyst Ratings for NOW
    View the Latest Analyst Ratings

    See more from Benzinga

    © 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

    Advertisement