Yahoo Finance 1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts
Written by Amy Legate-Wolfe at The Motley Fool Canada
I know it doesn’t seem likely right now, but a bull market is on the way. Bull markets happen after we go through an economic downturn and especially after a recession. Usually, a recession lasts about 11 months, on average according to economists. As of writing, this downturn started one year ago in April 2022. And we haven’t even entered a recession. That is why now is the time to build up your watchlist around a top tech stock.
Why a tech stock?
The entire tech stock industry went down right at the beginning of the economic downturn last year. No matter what the company was or how well it was doing, these stocks fell dramatically. That is exactly why you should be looking at them before the bull market starts and creating a solid watchlist.
While the tech stock you sold last year is down now, in a growth environment, investors will get excited once more. We’ve gone through downturns before and been fine on the other side. And as fearful as investors can be, they can just as easily turn excited.
But what tech stock should you pick up for when the bull market begins?
Think long term
If you’re going to buy a tech stock, you need to think longer than just the next year or so. Instead, you’ll want a company that’s proven it can stand the test of time. In this case, it needs to stand the test of economic uncertainty.
That definitely decreases your options, as there are many new tech stocks out there. The problem is that they are unproven in these trying times, or they’ve proven they won’t do so well. Instead, you can find a tech stock that’s been around for decades. And yes, they exist.
Don’t go for the most exciting option! Instead, look to a tech stock that has a proven method of growth and income. For that, I would consider CGI (TSX:GIB.A).
Hitting highs
While other tech stocks sink lower, CGI stock recently hit its 52-week highs! Quarter after quarter, the company continues to beat out earnings estimates and continues to produce strong annual reports as well.
Most recently, it reported a first-quarter profit, up 10% from the previous year, with revenue up 11.6% at $3.45 billion. Yet it still has a backlog of $25.01 billion in projects. And there is more on the way.
The company made several announcements after the first-quarter results, including a 10-year extension with the United States State Department, a new five-year deal with a French food service company, and a software partner with Microsoft Cloud.
Bottom line
CGI stock continues to have a solid method of finding strong software that can be bettered and used by the tech stock for these strong partnerships. Yet it still trades at a fair 21.49 times earnings. I would certainly consider buying it, even at these highs. It’s a tech stock that’s already climbed 30% in the last year but is up 392% in the last decade. And there will continue to be more room to run.
The post 1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts appeared first on The Motley Fool Canada.
Should You Invest $1,000 In CGI Group?
Before you consider CGI Group, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and CGI Group wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 4/18/23
More reading
Brookfield Asset Management Spin-Off: What Investors Need to Know
Passive Income: 4 Safe Dividend Stocks to Own for the Next 10 Years
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends CGI and Microsoft. The Motley Fool has a disclosure policy.
2023
