Enghouse Systems: Buy the dip and hold forever
The last stock that I would buy on the next market crash is Enghouse Systems (TSX:ENGH). Enghouse provides enterprise solutions that focus particularly on remote work, visual computing, customer interactions, and telecommunications networks. Its business is set up perfectly to prosper in a pandemic, work-from-home environment. In fact, it has a commercial-focused video-conferencing software (like Zoom) that is gaining strong traction.
In the first quarter, Enghouse saw a huge uptick in revenues, adjusted EBITDA, and free cash flows related to increased demand and a large one-time licence purchase. It just demonstrated that Enghouse’s service/product mix is “at the right place and at the right time.” Enghouse has a huge net cash balance of $168 million. If history serves correctly, it will patiently deploy this cash into some long-term accretive acquisitions.
This is a phenomenal company in the post-COVID-19 world. I would take any pullback or market decline to get in for the long run.
Stay hungry. Stay Foolish.
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