Open Text Corp. (TSX:OTEX)(NASDAQ:OTEX) is a Canadian technology company I think is relatively undercovered. This is a company that largely flies under the radar for most investors, but is an interesting choice right now given the increased interest growth companies in the software space are getting today from investors.
Open Text’s business model is one which is built on acquisitions. The company has deployed around $6 billion over the past 10 years in a series of acquisitions that has grown the company’s clientele base significantly. Currently, Open Text has more than 10,000 companies using its software globally with more than 100,000 end user touchpoints.
Additionally, around 90% of the company’s revenues are recurring, and most of these revenues are generated outside of Canada. For Canadian investors, this is good news, as this company can help diversify the portfolios of those with too much in the way of domestic exposure. For those looking for high-quality cash flow growers, Open Text fits that profile, with a solid recurring revenue business model underpinning such growth.
Open Text’s stock is not cheap, and this is a company that has traded at a premium for some time in the market. However, I think this multiple is deserved. I think long-term investors seeking growth should do very well over the long-term to pick up shares of companies like Open Text on any dips moving forward and hold for the long-term.
Invest wisely, my friends.
