The tech sector has been the primary driver for the TSX during the pandemic. Tech stocks managed to significantly offset the broader decline during the February and March 2020 pullback and continued growing as markets recovered.
The recent pullback in the tech industry made the entry barrier more accessible after many tech stocks grew to frothy valuations. However, the prices are still quite high, and finding a good deal is still quite challenging.
If you are willing to look below the radar, there are a few underrated stocks that could turn out to be low-key millionaire makers in your portfolio. I will discuss two such stocks that you could consider adding to your portfolio for substantial returns.
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Absolute Software
Absolute Software Corp. (TSX:ABT) is a tech sector stock but operates in a less exciting segment: cybersecurity. Absolute Software is among the companies that provide a crucial service to the rest of the industry, and its services have become even more critical in the last year.
As companies continue to practice the remote work culture and employees use personal devices to work, endpoint security solutions will remain invaluable. Absolute has been performing well over the last year. It is trading for $17.93 at writing, representing an almost 80% climb in the last 12 months.
The company’s customer additions, robust new product pipeline, and high retention rate can combine with its large addressable market for further growth in the coming years. The company’s strong and debt-free balance sheet and global growth potential warrant its position as a possible millionaire-maker.
Dye & Durham
Dye & Durham (TSX:DND) is trading for $39.77 per share at writing, representing almost 170% gains since its debut on July 17, 2020. The stock declined by over 24% since its February 2021 peak during the broader tech sector pullback. Its discounted price could make it a prized catch for your investment portfolio.
DND made a very successful debut on the TSX during the pandemic. While it may be a new name on the TSX, the company has been around since 1874. Today, DND is a top provider of cloud-based software and technology solutions. The company’s products are designed for business and legal professionals.
Its cloud-computing solutions provide its customers with critical information services and workflows to help them manage their process, information, and regulatory requirements. The company’s operations span from Canada to Australia, Ireland, and the U.K.
DND’s service is becoming increasingly important for its clients. With a client base that consists of law firms, financial service institutions, and government organizations, it has all the makings of a millionaire-maker. As more blue-chip customers flock to the business, it could become a massive company in the future.
Foolish takeaway
Cybersecurity stocks like Absolute Software and cloud computing stocks like Dye & Durham do not seem as exciting as electric vehicles or cryptocurrencies. However, both segments in the tech sector have immense long-term potential. It could be wise to consider establishing positions in both companies because they are potential millionaire-makers.
