BTIG Initiates Coverage Of Software Sector, Notes 'Early Innings Of Multi-Year Growth'

In a report published Monday, BTIG analyst Joel Fishbein initiated coverage of the entire Software sector, noting that we are in the "early innings" of a multi-year software growth cycle. According to Fishbein, Enterprise software spending is set to rise over the next five years, approaching nearly $400 billion by 2019. The analyst added that the group will benefit as customers continue switching from on premise to on-demand services that are accessible anywhere. Meanwhile, cloud computing continues to create "radical change" throughout the entire technology space by changing the way we communicate, connect and work. With that said, the disruption (which is already underway) creates new opportunities for businesses to grab share. Naturally, this implies opportunities for investors looking for exposure to the space. "For investors, enterprise software has been a story of haves and have-nots," Fishbein wrote. "There is a stark difference between high-growth, richly valued secular share gainers and legacy players potentially representing value opportunities. We are bullish on the underlying trends and believers in software as the main agent of change in enterprises, but think too many investors are chasing too few stories." Fishbein is recommending investors utilize a "selective approach" of buying "a handful" of secular tech stories rather than owning the entire group. The following companies were initiated with a Buy rating:

($70 price target),

($88 price target),

($85 price target), and

($92 price target).

(CommVault Systems, Inc.

($48 price target),

($44 price target), and

($58 price target).