5 Best Sectors To Invest In Heading Into 2023

1. Computer Software: Prepackaged Software

Prepackaged software is one of the best sectors to watch in 2023. Intuit Inc. (NASDAQ:INTU) is a California-based company that provides financial management and compliance products and services for consumers, small businesses, and accounting professionals in the United States, Canada, and internationally. The company operates through four segments – Small Business & Self-Employed, Consumer, Credit Karma, and ProConnect. It is one of the best prepackaged software stocks to invest in. 

On November 29, Intuit Inc. (NASDAQ:INTU) declared a $0.78 per share quarterly dividend, in line with previous. The dividend is distributable on January 18, 2023. The company also reported fiscal Q1 2023 earnings and revenue that came in above Wall Street expectations. 

Argus analyst Jim Kelleher on December 1 kept a Buy rating and a $580 price target on Intuit Inc. (NASDAQ:INTU) after its Q1 results. Earnings and revenue outperformed consensus given strength in the Small Business & Self Employed Group, and despite further weakening at Credit Karma, management reaffirmed its forecast for mid-teens EPS growth in FY23, the analyst told investors. The stock has fallen sharply, but Intuit Inc. (NASDAQ:INTU)’s fundamentals remain solid, which point towards the underlying value in the stock, the analyst contended.

According to Insider Monkey’s third quarter database, 86 hedge funds were long Intuit Inc. (NASDAQ:INTU), compared to 75 funds in the preceding quarter. Henry Ellenbogen’s Durable Capital Partners is a leading position holder in the company, with 1.70 million shares worth $660 million. 

Here is what RiverPark Large Growth Fund has to say about Intuit Inc. (NASDAQ:INTU) in its Q3 2022 investor letter:

“We took advantage of its 2022 price decline to add a small position in Intuit. INTU is a leading SaaS software solutions provider to small businesses, consumers, and professional accountants, best known for its QuickBooks accounting and TurboTax tax preparation platforms. INTU recently strengthened its personal finance offerings with the acquisitions of Mint and Credit Karma, and its small business offering with the acquisition of email marketing platform Mailchimp. The company is benefitting from the secular shift to digitization for both businesses and consumers. Given its vast amount of valuable personal finance and tax customer data from its 100 million + customer installed base, the company can apply artificial intelligence to the data to generate actionable intelligence for customers, as well as a large cross-selling opportunity across its products.

Given INTU’s less than 5% penetration of its $300 billion market, we believe the company can grow its top-line mid-teens, while improving its high-margin business model of greater than 80% gross margins and greater than 35% EBITDA margin, leading to high-teens EPS growth for the foreseeable future. At about 2% of revenue, the company also requires limited capital expenditures, producing significant and growing FCF, which INTU has used for acquisitions, a small dividend, debt repayment and stock buybacks.”

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