Finding really good Canadian technology companies can be difficult, in part due to the relatively few options available on the TSX compared to other global indices. While most investors tend to focus on the big Canadian names such as Shopify Inc. (TSX:SHOP)(NYSE:SHOP) and BlackBerry Ltd. (TSX:BB)(NYSE:BB), in this article I’m going to focus on one lesser-discussed Canadian software company with excellent fundamentals and future growth potential.
Open Text Corporation (TSX:OTEX)(NYSE:OTEX) is a company which was formerly focused on document management software, and has recently branched out into a cloud-based EIM (enterprise information management) model in which the company manages information for large corporate clients and SMB outfits as well. The company has done a good job of growing its core business, while also making a number of interesting acquisitions in recent years, branching the business out further into artificial intelligence and other related fields.
The AI play with Open Text is one of the key reasons many long-term investors are focused on Open Text at this point in time, with the potential for growth viewed as much higher than what has been priced into OTEX’s stock price. Fundamentally, Open Text is valued on par with many of its peers, with a forward price to earnings multiple of around 12 and a forward EV/EBITDA of around 10, relatively attractive numbers for a sector with many companies valued much more dearly at this point in time.
Invest wisely, my friends.
