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2 Software Stocks to Watch in the 2nd Quarter of 2019

- By Jacob Maslow

Software stocks are soaring, with a focus on cloud computing. Progress Software Corp. and Intuit Inc. are two companies that have achieved impressive year-to-date growth of over 25%. These software stocks should be on every investor's must-watch list.

1. Progress Software Corp.

Progress Software Corp. (PRGS) stock is up over 26% year to date to around $44.80. The stock is rebounding after a difficult 2018, when shares dipped to lows near $30 a share. Progress Software's cloud-based applications make it a potential target for acquisition from larger companies.

The company's cloud-based offerings include security solutions that are used by mid- and large-sized organizations.

Progress Software's earnings for first-quarter 2019 show that the company's revenue fell to $89.5 million from $95.4 million year-over-year. The company's falling revenue still beat expectations, with posting better-than-expected license software management revenues, acquisition of Ipswitch and OpenEdge all providing shareholder value in the first quarter.

The acquisition of Ipswitch is expected to boost the company's core offerings to small- and medium-sized businesses. Ipswitch has 24,000 customers in 170 countries, with $75 million in revenue across all verticals.

Progress Software has achieved over 15.68% share price growth in the last year, outpacing the S&P 500, which rose 9.22% during the same period. The company's rise in the past quarter was 31.15%, beating the S&P 500's gain of 10.57% during the same period.

2. Intuit Inc.

Intuit Inc. (INTU) is a provider of accounting and tax preparation software. The company just experienced its busiest time of the year. Consumer tax, small business and self-employed segments have all experienced impressive growth in recent quarters.

The company's stock soared in the first quarter, and its price is up 32% year to date to around $260 per share.

Cost-cutting initiatives should add to the company's revenue in 2019. Its revenue in the fiscal second quarter of 2019 hit $1.5 billion, up 12%. Revenue for the company's small business online segment increased 38%. Small business and self-employed segments grew to $833 million in revenue, increasing 17%.

The Taxpayer First Act passed through the House Ways and Means Committee, and a similar bill is making its way through the Senate. The bill would make it illegal for the IRS to create its own online tax filing service. A passing of the bill would further strengthen Intuit's market share.

Disclosure: Author has no stake in the listed equities.

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This article first appeared on GuruFocus.