Buy This 2018 Tech IPO and Hold it Forever

Ceridian HCM Holdings Inc. (TSX:CDAY)(NYSE:CDAY) is a hot stock that “won” the IPO class of 2018.

Joey Frenette ❯

Joey Frenette is a journalist, University of British Columbia graduate, ex-engineer, Warren Buffett fanatic, and Fool who's completed CFA Level 1. He’s been investing since 2014 and is always on the hunt for value, regardless of the market "weather." Before writing at The Motley Fool, Joey worked as an analyst/developer at several Canadian small- and mid-cap software firms, including Syscon and Avigilon. Beyond Motley Fool, Joey’s work can be found at TipRanks and InvestorPlace. Follow or send him a message on X (or Twitter) @realJoeFrenette

Published July 10, 2019 4:00 pm EDT

In a recently published piece, I gave praise to the largest (and brightest) name in the IPO class of 2018 — Ceridian HCM Holdings (TSX:CDAY)(NYSE:CDAY), urging growth-savvy investors to consider the name for their long-term portfolios.

It was a quiet year for Canadian IPOs, and while I’m not a fan of playing the IPO game until after the dust has settled, I think it’s worthwhile to pay attention for compelling names that you may want to add to your radar. Ceridian was one of those names, and only recently did I begin pounding the table on the hidden gem.

The sheer excitement that comes with IPOs leads to big booms and busts, drawing in speculators and traders galore, most of whom want to make a quick buck. When it came to Canada’s IPO scene last year, however, it was quiet — too quiet, such that you could hear the tumbleweeds rolling by.

Now that a year has past and the dust has settled on the modest hype, it’s time to get some skin in the game with what should have been the talk of the town last year. Ceridian is a compelling SaaS (software-as-a-service) play, a cloud play, and it’s at the forefront of one of the largest growth opportunities of the next decade.

The market for human resources services is massive, and it’s ripe for technological disruption. Not only do HCM (Human Capital Management) solutions like Ceridian’s Dayforce HR aim to make the lives of HR professionals easier, it could ultimately replace them at some point down the road when the platform reaches that level of sophistication.

Yes, it does appear like robots are coming for our jobs. And with the amount of innovation going on at Ceridian and the exceptional stewards (led by CEO David Ossip, who’s a pioneer in the field of innovative HR solutions) running the show, I think Ceridian could evolve to become one of the next big multi-baggers.

An untapped market that’s ripe for disruption, solid management, the cloud, and SaaS-based tech. What’s not to love about the name? The stock has been consolidating since March and is due for a big breakout.