Tyler Tech: Public Sector Profits

07/22/2015 7:00 am EST


Michael Cintolo

Vice President of Investments and Chief Analyst, Cabot Heritage Corporation

This featured recommendation might not be the most exciting story, but it’s certainly a big one; the company provides integrated information management solutions to local governments and other public sector groups all over the world, explains growth stock expert Mike Cintolo, editor of Cabot Top Ten Trader.

If you’re a city government employee, you probably know Tyler Technologies (TYL) and you’ve probably used their products to automate project costing, citizen complaint tracking, ambulance billing, or code enforcement.

If you work in a school administration, you might have used its products to organize student information and transportation.

And if you’re involved in the tax system, it’s possible that you use one of Tyler’s products for appraisal or assessment of properties or tax billing and collection.

Tyler also provides subscription-based services for filing, professional IT installation, and training to any and all law offices and courts in its jurisdiction.

Tyler Technologies might quietly be one of the most ubiquitous providers of information management solutions in the country, but the key here is growth.

Tyler Technologies has experienced double-digit earnings growth for the last three years and analysts expect that to continue into 2015 and 2016. Its dependability and far-reaching influence have kept big investors accumulating shares.

TYL’s persistent, measured growth makes it what we like to call a “tractor stock.” With the exception of the eight months the stock took to catch its breath in 2014, TYL has gained at least 40% each year since 2011, even doubling its share price in 2013.

Since February, it has locked in a 20% gain from $105 to $139 (an all-time high), 10% of which came last month on the news that TYL had ousted yet another old-school management systems company, this time for appraisal services in North Carolina.

Technically, the stock looks buyable at current price levels or on a dip to 137, with a stop in the mid-$120s.

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