Supply-chain chaos will have its losers and winners; possible winners are logistics companies with the technology and reputation for helping clients manage their complex supply-chain issues, suggests Carl Delfeld, international growth stock specialist and editor of Cabot Explorer.
Which brings me to my latest recommendation. Founded in 2006, Coupa Software (COUP) specializes in software that provides cloud-based business through its spend management platform.
Its platform connects organizations with suppliers globally, and provides visibility into and control over how companies spend money, optimize supply chains, and manage liquidity, as well as enables businesses to achieve savings that drive profitability.
Its platform connects its clients with over 7 million global suppliers, helping them purchase the goods and services they need to run their businesses. At the same time, Coupa’s tools help companies build more robust supply chains and save money through strategic procurement such as pre-negotiated discounts with suppliers and pooling client purchase orders.
All of these transactions create data to which Coupa applies artificial intelligence to gain insights that clients can capitalize on to give them an edge over rivals. Some specific services include procurement, invoicing, expense management, payment platforms, contract management, contingent workforce, supplier risk management, and supply-chain design.
The company markets its payments platform and services primarily through a direct sales force. In addition, Coupa has a strategic joint venture with Japan Cloud Computing, and Coupa has an app allowing clients to integrate data and tools with companies such as Microsoft (MSFT) and Workday (WDAY).
The company already has 2,000 clients, including Amazon (AMZN) and Wal-Mart (WMT), with some analysts estimating its potential target market at $94 billion. While the company is still unprofitable, in its most recent quarter Coupa’s revenue surged 42% and free cash flow reached $643 million. We recommend buying one half of your intended position.