I reserve my portfolio for companies that have futures that are exciting to me. That said, I have a handful of Canadian companies in my portfolio. I have been wanting to buy one of them for a couple months now but have not been able to previously.
What company did I buy?
I first covered Docebo (TSX:DCBO) at the start of June. At that time, it had already increased about 145% since hitting its bottom during the COVID-19 market crash. Overall, since its IPO, Docebo stock had increased about 91% when I first wrote that article. Following the Motley Fool’s mantra of “winners win,” his performance is what made me initially interested in the company.
Looking further into what the company was about, the dramatic increase in stock price since the 2020 market crash made sense. For those who are unaware, Docebo provides an e-learning platform for enterprises.
It uses proprietary AI technology to help streamline the online training process. In addition, its platforms provide helpful options which allow managers to better monitor employee progress.
As I have mentioned previously, the gains recently seen in the stock are likely a result of two strong tailwinds. First, companies around the world are slowly adopting increased digitization of common tasks.
Where some companies offer digitization solutions for due diligence, tax filing and accounting, and payroll; Docebo’s platforms are the equivalent for the training space. This will result in a gradual increase in its customer base over the next few years.
A second tailwind experienced by the company is the COVID-19 lockdown. Because of the enforced shutdowns around the world, many companies ordered employees to work from home. This includes smaller companies, as well as Fortune 500 corporations.
Is Docebo a good buy?
This question depends on your investment horizon. Yes, the stock has gone up a lot in the past few months. Since I first covered the stock, it has increased over 70% alone. This means that a pullback could very well happen if investors believe that the stock’s value is much greater than where it should be. Therefore, if you are looking for a shorter-term company to invest in, this may not be a great option.
However, if you are thinking of a company that can grow 10 times over the next decade, then buying here may not be a terrible idea. If the stock falls, you will be able to add to your position at a better price.
Docebo currently has a market cap of just over $1 billion, meaning it is still relatively small. Given the current customers it has under its belt, Docebo should still have a long growth runway ahead of it.
After months of writing very strongly about Docebo, I have finally added the company to my portfolio. Docebo is a very exciting up-and-coming company with great growth potential.
Yes, its stock has gone up a great amount in recent months, but I am still very much looking forward to following this company in the years moving forward.