MSFT: 3 Soaring Software Stocks

Let’s set a proper backdrop so you truly appreciate just how spectacular these 3 software stocks are performing this year. The S&P 500 is up a solid 3.2% year to date. While these three stocks, ADBE, MSFT & TEAM, are up a much more impressive 11% to 23% in that same short span.

As we all know “past performance is not a guarantee of future results”, BUT there is good reason to believe that this early hot start is a sign of more gains to come. One of those key reasons is that Software stocks is the #4 ranked industry out of the 123 measured by the POWR Industry Rank. On top of that each of the individual stocks is rated as an A (Strong Buy) in the POWR Ratings system.

Now let’s take the time to dig in deeper on each stock to see what is driving the price action and what that means for the future.

Microsoft (MSFT)

I know many people had written off MSFT as being another tech dinosaur like IBM. Neither firm garners the love and adoration given to the likes of Apple. And were left out of the famed FANG acronym like other tech darlings.

However, when you truly appreciate how MSFT has seriously changed their business strategy, with a much bigger concentration on the cloud…then you can open your eyes to nearly 4 straight years of non-stop earnings triumphs and share price gains.

Even though MSFT shares have tripled in value over the last 3 years, and up an impressive 16.6% this year, most analysts still see plenty of upside ahead. In fact, 5 Star analyst, Daniel Ives of Wedbush, was so impressed with Microsoft’s recent beat and raise quarter that he has a street high $210 target on shares.

On the POWR Ratings front it truly is like a poker hand with 4 Aces. Meaning that MSFT sports A ratings across the board for Trade Grade, Buy & Hold Grade, Industry Rank and Peer Grade. Full MSFT ratings detail here.

3 STOCKS TO DOUBLE THIS YEAR

Adobe Systems (ADBE)

We all know Adobe because we all deal with PDF documents on a regular basis. That just scratches the surface on the $13 billion a year software empire ADBE has built over the years.

The excellence of Adobe’s operation is clearly on display with quarter after quarter of beat and raise results. The Creative Cloud and Adobe marketing cloud are the driving force behind ADBE stellar profit and share price gains

+11% year to date

+25% the past 3 months

+215% the past 3 years

+406% the past 5 years.

This track record of long term success makes it easy for investors to bid up ADBE shares coming into their next earnings report.

The POWR Ratings picture for ADBE is also impressive. Just like Microsoft it a report card full of A’s for Adobe. This is what gives the best hope that ADBE shares will continue to outperform in the days and weeks ahead. Full ADBE ratings detail here.

Atlassian (TEAM)

As they say, lets save the best for last. In this case Atlassian leads this pack of soaring software stocks with an impressive +23% gain year to date. The main catalyst for which was a spectacular 37% earnings surprise a couple weeks back that had TEAM shares bolting higher.

Gladly this is not a freak event. TEAM’s cloud based software solutions have been widely adopted allowing them to punch out beat and raise quarters every time since it IPO’ed in 2016. That is the driving force behind the 426% gain for Atlassian shares the past 3 years. That’s more than 7X the pace of S&P 500 in the same span.

For as much as shares have rallied this year, and in years past, top analysts see even more upside for TEAM. Most notable of which is 5 Star analyst Gregg Moskowitz from Mizuho Securities. He sees $180 as fair value for TEAM over the next 12 months.

All this momentum is getting swept up in Atlassian’s elevated POWR Ratings. Just like the predecessors above you will find A ratings across the board for TEAM which points to these being timely and attractive shares. Full TEAM ratings detail here.

Want more great stock picks? Then check out these additional resources:

All Software Stock Ratings

POWR Rating A (Strong Buy) Stocks

Reitmeister Total Return portfolio

MSFT shares closed at $183.89 on Friday, up $0.26 (+0.14%). Year-to-date, MSFT has gained 16.61%, versus a 3.21% rise in the benchmark S&P 500 index during the same period.

About the Author: Steve Reitmeister

Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...