The mutual fund, which made a killing off Amazon and Tesla, is now focused on these stocks

Joshua K. Spencer steered his T. Rowe Price Global Technology Fund to become the best-performing mutual fund in the past five years with big bets on Amazon.com Inc. and Tesla Inc.
With many traditional tech stocks at sky-high prices, he’s now focused on companies with stable business models and “sticky” customer relationships that produce recurring revenue regardless of economic conditions.

Here’s how the T. Rowe Price Global Technology Fund PRGTX, +1.59% has performed against its benchmark, the MSCI All Country World IT Index, as well as the S&P 500 SPX, +0.83% through June 12:

With the tech sector so high, Spencer emphasized the importance of focusing on companies with stable business models and “sticky” customer relationships that are “very resistant to economic fluctuations.” He named three companies:

Intuit Inc. INTU, +0.90% is the developer of TurboTax and QuickBooks software. TurboTax is continually updated as tax rules get more complicated, while small businesses using QuickBooks for various operations, including payroll, billing and bookkeeping, are unlikely to switch to another product, which gives the company pricing power.
“The stock has done very well lately, but it is still attractive on valuation,” Spencer said.

Ultimate Software Group Inc. ULTI, +1.32% provides payroll and human-resources software to companies with 500 to 5,000 employees, representing a different market niche from the one served by Intuit with QuickBooks.
Ultimate Software Group has a 97% annual retention rate for customers, who pay monthly for their subscriptions, he said.
“I think they have many years of growth ahead of them."

While Intuit and Ultimate Software Group serve small and medium-sized businesses, respectively, Workday Inc. WDAY, +1.85% provides HR software to large enterprises. Workday is “running at about $2 billion in revenue, and I think they can grow that to $10 billion,” Spencer said.

Source: Bloomberg

Trader I. Ivanov

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