If you listened to Wall Street – rarely a good idea – you’d think that software firms are little more than aging dinosaurs in the tech sector.

After all, it seems like eons ago when these “dinosaurs” were scrapping hard to land prime placement for their products at brick-and-mortar stores.

However, no meteor has come along and taken out software and our need for it – far from it, in fact.

[ad#Google Adsense 336×280-IA]It’s just moved – to the cloud.

Rather than buying shrink-wrapped packages full of CDs, we now “rent” software as a monthly service delivered to us via the web.

According to the analysts at International Data Corp., this cloud-computing subsector, Software-as-a-Service (SaaS), will reach $50.8 billion by 2018, up from $22.3 billion in 2013.

That’s an annual growth rate of nearly 18% in five years.

With big money and fast growth like that up for grabs, you know that plenty of tech-savvy newcomers are shaking up the marketplace.

On the other hand, Wall Street is partly right – most of the old-school software companies are struggling to stay relevant.

But one Silicon Valley legend is quietly transforming itself into a cloud-based provider of essential software tools. (I bet you use at least one of them.)

Today, I’m going to show you how this company is doing that.

And then I’ll lay out how you can use it to make 100% gains in less than five years…

20 Years of Number Crunching

I’m talking about Intuit Inc. (Nasdaq: INTU), a company that’s been around since 1983 – truly “eons” in the modern tech age.

This software firm has been taking the stress out of taxes and accounting with TurboTax, QuickBooks, and Quicken.

And more recently, Intuit pioneered the move to cloud-based accounting when it launched QuickBooks Online in 2001.

Today, that service has more than 1 million subscribers.

But it has much more aggressive plans for the cloud. Intuit plans to more than double its number of cloud subscribers by the end of 2017.

I’m confident it can accomplish that goal.

Consider this statistic from a report I just read…
Nearly 80% of U.S. small businesses will use cloud computing by 2020.

The Cloud-Mobile Combo

And Intuit is aggressively using acquisitions to fuel growth over the next few years.

For example, Intuit is combining its SaaS products with another growth sector – mobile. To help do so, Intuit picked up Mint.com for $170 million in 2009.

The website is a free cloud-based personal finance portal. With it, you can track your bank accounts, credit cards, investments, and loans – all through a single user interface.

One of Mint.com’s strong suits is its seamless integration to smartphones and tablets. In fact, it’s received rave reviews from Forbes, Business Insider, Time, and CNBC as the app for personal money management.

Mint now boasts more than 20 million users and connections to some 16,000 financial institutions throughout North America.

Six million people have downloaded Mint’s mobile app from Apple Inc. (Nasdaq: AAPL). In fact, Mint recently launched a version for the Apple Watch.

And another 10 million folks have downloaded Mint’s app via Google Inc. (Nasdaq: GOOG, GOOGL).

And Mint.com was just a start.

Since the beginning of its fiscal 2014, Intuit has quietly bought more than 15 companies, covering everything from market analytics to cloud data security.

Last December, it bought Acrede, a cloud-based platform that processes payroll for employees in more than 30 countries. Before picking up that UK-based company, Intuit could provide cloud payroll services only to its U.S. customers.

The company says it acquired Israeli cloud security firm Porticor in February to help organizations – the U.S. government in particular – combat tax evasion and Internet scams.

In May 2014, Intuit acquired Silicon Valley mobile bill payment company Check to improve the mobile services of its Quicken and Mint platforms. Check was rebranded Mint Bills shortly after the buyout.

To put these changes in context, I’m going to run Intuit through the five filters of “Your Tech Wealth Blueprint.”

Rule No. 1: Find Great Companies with Great Operations

Intuit scores well here.

CEO Brad Smith previously worked as an exec at PepsiCo Inc. (NYSE: PEP), the 7 Up division of Dr. Pepper Snapple Group Inc. (NYSE: DPS), and ADP LLC (Nasdaq: ADP), a leading human resources and payroll management firm.

Board chairman Bill Campbell has logged stints at Apple, Eastman Kodak Co. (NYSE: KODK), and J. Walter Thompson Co., the New York-based advertising agency. And Chief Technology Officer Tayloe Stansbury cut his teeth at Sun Microsystems Inc. and PARC, Xerox Inc.’s (NYSE: XRX) renowned Silicon Valley R&D unit.

Rule No. 2: Separate the Signal from the Noise

To create real wealth, you have to ignore not just hype from the company, but also the noise coming out of Wall Street.

Indeed, the Street still largely thinks of Intuit as a straight-up financial software firm. It has yet to price into the stock the fact that the company is quietly shifting to high-margin operations in the cloud and mobile.

Rule No. 3: Ride the Unstoppable Trends

You should look for stocks in red-hot sectors because they offer the best chance for market-beating gains. Intuit has this base well-covered.

Over the last several years, the Palo Alto, Calif.-based company has shifted away from relying on software sales to become a leading cloud-based provider of accounting, finance, and human resources management for consumers and small- to medium-sized businesses.

That puts it in a market growing by more than 18% a year. It’s also targeting the power of mobile commerce, a field that Forbes estimates will nearly double to $280 billion this year.

Rule No. 4: Focus on Growth

Companies that have the strongest growth rates almost always offer the highest stock returns.

Last year, Intuit grew its sales by 8% and earnings per share by 10%, which means it’s growing several times faster than the nation’s economy, which gained an average 2.4% last year.

Intuit recently raised guidance on sales and earnings and is targeting double-digit growth. No doubt that will be aided by the 15 acquisitions it’s made in the past two years.

Rule No. 5: Target Stocks That Can Double Your Money

This is where we look at Intuit’s earnings projections and see how long it will take the firm to double profits. By doing that, we can figure out how long it should take for the stock to double.

I’ve gone through the firm’s financials in detail, and I’m projecting earnings per share will grow an average of 14%. I base that on Intuit’s strategic plan to improve shareholder value.

Now we use what I call my Doubling Calculator. Divide the compound growth rate of 14 into the number 72. We find that it should take a little more than five years for Intuit’s stock to give us 100% gains.

Intuit opened today (July 21) at $106.29, giving it a $29.34 billion market cap. It has 20% operating margins and a 12.6% return on equity. Over the past year, it has gained 30.5%, more than four times the Standard & Poor’s 500 Index’s 7.3% return.

All that makes Intuit a great foundational play. This is the kind of stock that can give your portfolio a solid base in a volatile market.

And with its forays into the cloud and mobile technology, this “dinosaur” will keep adding new growth for investors over the “road to wealth’s” long haul.

— Michael A. Robinson

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Source: Money Morning