Their research keeps your gains climbing

Article Excerpt

With all stocks—but especially tech stocks—you can put the odds in your favour by investing in companies that have hidden assets. Most other investors overlook them. Today’s best-hidden asset is research spending (see box this page). Both Adobe and ACI Worldwide look expensive in relation to their earnings. That’s partly due to the high amounts they spend on R&D, but also their strong future growth prospects. Their commitment to staying ahead of the competition is another plus. ADOBE INC., $272.70, is a buy. The company (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 485.4 million; Market cap: $148.4 billion; No dividends paid) makes software that lets computer users create, edit and share documents in the popular PDF format. The company’s decision a few years ago to switch to selling its programs as ongoing subscriptions instead of one-time purchases continues to pay off: In the quarter ended August 30, 2019, its revenue rose 23.7%, to a record $2.83 billion from $2.29 billion…

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