If You Don’t Buy This 1 Lesser-Known Stock Today, You’ll Regret It Later!

If you are looking for a fast-growing software company to buy in, Ceridian stock should be on your radar.

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Many people make the mistake of considering investing as a get-rich-quick scheme. While it’s right in some cases, it’s not a general rule of thumb. What most investors agree on, though, is that investment is a long-term game.

Whether you want to grow your wealth by investing in dividend stocks or stocks that provide capital gain, you may build your wealth, albeit, at different paces.

Even if extensive diversification is not your goal, a balanced investment portfolio should have a variety of stocks belonging to different sectors.

Software companies have always been overshadowed by the financial and energy sector in the S&P/TSX Composite Index. This trend is why it isn’t surprising that a fast-growing software stock: Ceridian HCM Holding (TSX:CDAY)(NYSE:CDAY) is not very well known. But it should be.

Apart from Shopify, IT and software stocks tend to attract little investment action in the country. Whereas just across the border, software stocks tend to see a lot of activity.

If you’re interested in a fast-growing stock, Ceridian should catch your attention. The company grew its market value by more than 31% just this year. This growth is more than the company’s giant competitors: ADP and Paychex.

An enterprise software company 

Ceridian is a software company. The company’s core product is the flagship software: Dayforce. Dayforce is an Enterprise HCM software that covers all the employee-related responsibilities of a company in one cloud-based solution.

It’s counted among the top 20 HCM software in the world, and also as one of the best SaaS (Software as a Service). Ceridian has a market cap of $9.38 billion.

The company increased its revenue generation by 9.6% from last year, and by 9.7% in the previous quarter. Ceridian experienced a fantastic previous quarter and is expected to do very well in the next one too.

Market value

Currently, Ceridian is trading at $65.72 per share at writing. This value represents a growth of 31.44% from the same time last year, and it’s not even the yearly high.

The company hit an exponential growth of 55% in its market value in late August. If we watch the growth from the beginning, when the company started trading on the TSX in April 2018, the market value has grown by 69%.

If Ceridian follows the same path and growth rate, it may have the potential to double the capital gains of investors in a matter of years. Not even two years old on the index, the company has beaten the growth of the S&P/TSX Composite Index by a difference of 21.5%.

Ceridian operates in the HCM market, which was worth $19.78 billion in 2018 and is expected to grow to twice the size, that is, $40 billion by 2026. This indicates a bright future for a fast-growing company in a faster-growing market.

Foolish takeaway

Ceridian is trading significantly lower than its all-time high value, a position that may change with the next quarter results. If you don’t want to regret it later, it might be high time to consider adding this software stock in your investment portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. Shopify is a recommendation of Stock Advisor Canada.

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