New companies that disrupt industries with innovative products often have good-to-great stocks. The reason is these new products help businesses become more efficient. So companies are paying money for the software, but saving more as labor costs are reduced.
One of the top industries in the stock market today is software. Software stocks are killing it because they streamline human resources tasks, perform financial calculations, help companies communicate with their customers better, and assist in advertising.
What’s nice about software stocks is there is little cost of goods sold (COGS) so up to 40% of revenue can be plowed into Sales & Marketing to drive even higher sales and of course profits.
Software stocks have been hot so far this year, so many of these names are close to fairly valued. Still, these selections offer growth opportunity long term.
