RBC Following Latest Sell Off In Software Stocks: Focus On Disruptors Salesforce, ServiceNow, Proofpoint

RBC Capital Markets recently issued a report on the software industry following the most recent decline in multiple companies within the software index. Matthew Hedberg and Ross MacMillian highlighted ServiceNow Inc.

, Salesforce.com, Inc.

, and Proofpoint Inc. as companies that, "have sold off but could be big outperformers on a two-three year view." RBC Capital markets noted that the decline in stock values within the software industry followed a generally well performing earnings season, with many software firms providing in-line to better than expected earnings announcements. However, analysts point out that one weakness for a majority of the firms that announced earnings was a slowing profit margin, which could reflect macroeconomic and currency headwinds. With the recent decline in share values, analysts believe that this may be a sign of decreased earnings forecasts for 2016 as companies attempt to maintain profitability and achieve top-line growth. RBC went on to recommend two "safe" stocks based on the strength of their fundamentals: Microsoft Corporation

and Oracle Corporation

. With strong brand names, viable cash flow, and strong product demand, RBC sees these two companies as key players that can perform well even in challenging market conditions. Currently, ServiceNow is trading at $48.14, up 2.12 percent. Currently, Salesforce.com is trading at $55.55, up 2.78 percent. Currently, Proofpoint is trading at $37.12, up 1.43 percent. Currently, Microsoft is trading at $49.47, up 0.17 percent. Currently, Oracle is trading at $35.34, down 0.45 percent.