The Motley Fool

This 1 Successful Tech Stock Is a Must-Own in 2020

Three sectors – Financials, Energy, and Materials – dominate the TSX, but the Technology sector is starting to boom. Over the last five years, however, the Technology Index has been outperforming the TSX, and there’s no stopping the acceleration.

You can include one of 2019’s best-performing stocks in your 2020 portfolio. Kinaxis (TSX:KXS), the cloud-based subscription software company from Ottawa, Canada is ready to make a splash next year.

Well-covered

Kinaxis is one among more than a dozen tech stocks that market analysts cover and follow. Despite the general weakness of the sector in 2019, however, this stock is showing gains of 53.7% year to date. Analysts covering KXS believe it could post the highest growth rate and expects a 19% CAGR in the next five years.

Low-key

This $2.7 billion company is low key, yet it’s sparking investor interest. Its supply chain solutions are not only, trendy but also a vital need across various industries. Kinaxis peddle SaaS solutions for supply chain planning.

The software it provides to top-name customers serves as a control tower for their respective supply chains. These clients can perform scenario analysis using Kinaxis’ software.

The software can flag problems or bottlenecks so users can predict the impact on operations and make timely decisions.

Now that the entire software space is catching fire, Kinaxis should emerge a key player next year and beyond. There’s plenty of organic growth in the long term.

Crown jewel

RapidResponse is Kinaxis’ crown jewel. This cloud-based subscription software is dedicated to supply chain management and operations.

As it’s a collection of cloud-based supply chain planning and sales and operations planning (S&OP) solutions, the functionality can be customized to a specific industry.

The company lands and expands its client base too because of the innovative software. Usually, contract values increase once customers get accustomed to using RapidResponse.

Kinaxis is doing a great job of growing at a pace that allows for profitability every year. About 80% of its revenue is recurring, while 65% of the revenue is subscription-based.

You can say that the company is still scratching the surface. Many companies, especially the big ones, are prospective clients.

Even in the new era of best practices for tariff and trade management, end-to-end planning is necessary. Kinaxis should emerge as a reliable company that can provide specialized global trade management software and processes. It would enable companies to become best-in-class organizations.

Next tech winner

Kinaxis is still expanding and working to assist clients worldwide. By using its digital technology for more sophisticated supply chains, companies can achieve supply chain efficiencies and respond immediately to business changes. Also, there will be a shorter time for planning, which would result in faster decision-making.

This tech stock’s performance over the last five years is nothing short of spectacular. The shares of Kinaxis grew by 452.5% during the period. Expect the company to help billion-dollar companies to transform their supply chains and realize dramatic results.

If you’re looking for a Canadian tech winner to include in your 2020 stock portfolio, consider Kinaxis. The company is growing at a decent clip and could outperform the market in the years ahead.

This Tiny TSX Stock Could Be the Next Shopify

One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!

Click here to discover how!

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends KINAXIS INC. Kinaxis is a recommendation of Stock Advisor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.