Software A Relative Outperformer, Says BCA Research

Our friends at BCA Research were kind enough, yesterday, to slip the following software musings over the transom at TTD, and I nearly fell off my chair: Buy software stocks! As the folks at BCA see it, “The corporate sector, now more than ever, is trying to squeeze every bit of productivity out of resources.” Well, sure. So? “Productivity-enhancing software firms are the prime beneficiaries. During an economic downturn, overall IT budgets drop (expensive hardware refresh cycles get postponed), however, software-related outlays remain resilient.” Well, I guess that makes sense. Better yet, says BCA, “Investors need not pay up for these attractive defensive characteristics as relative price-to-earnings multiples are close to cyclical lows.”

And who are they thinking of, exactly? Adobe (ADBE), BMC (BMC), Citrix Systems (CTXS), Intuit, Computer Associates (CA), Compuware (CPWR), Electronic Arts (ERTS), Microsoft (MSFT), Novel (NOVL), Oracle (ORCL), Salesforce.com (CRM), Symantec (SYMC).