not vested
Oversold Tech Leader: Adobe Inc. (NASDAQ: ADBE)
Even in the best of bull markets, a gain of 36.6% in just over seven months is nothing to sneeze at. That means Adobe beat the broad market by 72.6% in the period.
Then again, Adobe said on June 18 that it had achieved record quarterly revenue of $2.74 billion for its fiscal second quarter that ended May 31. Those sales were up 25% from the year-ago quarter.
With earnings of $1.83 a share, it beat forecasts. It also offered an upbeat report for the rest of the year. Following that bullish report, no fewer than 11 analysts upgraded the stock.
I have to say that I’m not surprised at how well this software leader is really doing. I’ve recommended this stock several times since the summer of 2013.
I’ve done so because the company has done a great job of moving from standard software sales to recurring revenue through a cloud-delivery format.
It now offers a suite of products through its Creative Cloud platform that is nothing short of a cash machine. It has profit margins of 39% and a 38% return on equity.
The firm also has a crackerjack CEO. Barrons named Shantanu Narayen one of the world’s best CEOs in 2016 and 2017. I’m projecting 35% gains over the next three years.
Source: Daily Trade Alert