BUY ALERT: 3 Tech Stocks That Are Screaming Buys Today

Tech stocks have held up reasonably well this year while the Canadian market is down close to 10%. Here’s a list of three top tech stocks that have the potential for marketing beating returns.

Nicholas Dobroruka

Nik has been writing for The Motley Fool Canada since 2020. After studying marketing at University in his hometown of Montréal, Nik decided to pack up and move west to Vancouver. By day, Nik is a digital media ninja, specializing in Programmatic advertising. By night, you can find him either Mountain biking in Vancouver’s famous North Shore trails or writing for TMF Canada. Tech, digital payments, and renewable energy are three areas that Nik enjoys following and writing about.

Published July 7, 2020 2:49 pm EDT

In a year where the S&P/TSX Composite Index is down almost 10%, it can be difficult to be optimistic about investing in stocks.

The majority of industries across the board have taken a hit this year as the COVID-19 virus has dramatically impacted economies across the globe. Technology is one industry that has held up reasonably well. Many tech companies are now hitting all-time highs, even as the broader Canadian market is down close to 10%.

I’ve covered three tech stocks that I believe have a long runway of growth still left. Only one of the three is trading today at an all-time high, but if you’re a long-term Foolish investor, I’d suggest adding at least one of these tech stocks to your watch list today.

BlackBerry

Once a market leader in the smartphone industry, BlackBerry (TSX: BB)(NYSE: BB), now in the high-margin business of software development, has seen a major change in strategy.

The $3.5 billion company predominantly specializes in cybersecurity. And as more and more employees are leaving the office to work from home, the need for cybersecurity services should only continue to accelerate.

The tech company has also turned to acquisitions to help accelerate revenue growth. In 2019, BlackBerry purchased the AI-driven cybersecurity company, Cylance. Management commented that the move was made to strengthen BlackBerry’s move toward being the world’s most trusted AI-cybersecurity company.

Constellation Software

Constellation Software (TSX: CSU) has had an incredible run since going public in 2006. Year to date, the stock is also up 20%, while the Canadian market is down almost 10%.

The $30 billion company builds out vertical-specific software for both public and private sector clients, which partly explains why it may not be a household name among Canadian investors.

Similar to BlackBerry, Constellation Software has implemented an acquisition strategy to help drive growth. The company focuses on acquiring smaller software companies that offer very niche products and services.

Due to the limited competition for the niche companies, Constellation Software often is able to acquire these businesses for very attractive prices.

Constellation Software has largely outperformed the Canadian market since going public 15 years ago. As the company is still very aggressive in its acquisition strategy, this is one tech stock that I’d feel comfortable betting on to continue to outperform the Canadian market.

Open Text

Open Text (TSX: OTEX)(NASDAQ: OTEX) is trading basically flat this year so far. The $15 billion company is in the business of information management. It specializes in building digital and cloud infrastructure for its clients.

As more than 80% of revenue is recurring, Open Text benefits from having a very predictable revenue stream. The recurring revenue model lead to year over year quarterly growth of 14%. The largest business division, Cloud Services and Subscriptions, saw impressive growth of 42%.

Open Text is a rare tech company that offers growth and a dividend to investors. Perhaps not as high of a yield as some of the other Canadian Dividend Aristocrats, Open Texts offers a respectable 1.6% yield at today’s stock price.

Foolish bottom line

The world has been significantly altered by the effects of the COVID-19 pandemic, and each of these three tech companies stands to see an increase in demand due to these changes.

If you’re looking for a tech stock with the potential of market-beating returns, I’d recommend adding at least one of these companies to your watch list today.