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Best Stocks of 2016: Globant SA (GLOB) Emerges as Digital Transformation Leader

The Internet of Things should be a boon for GLOB stock

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Editor’s Note: This article is part of our Best Stocks for 2016 contest. Jon Markman’s pick for the contest is Globant SA (NYSE:GLOB)

Software is changing the face of commerce and the small, nimble companies using new technologies to shape user experiences are reaping the rewards. That’s the story of Globant SA (NYSE:GLOB), my pick for Best Stocks for 2016.

Best Stocks of 2016: Globant SA (GLOB) Emerges as Digital Transformation LeaderYou wouldn’t expect a small creative company based in Buenos Aires would be so sought after, yet Cisco Systems, Inc. (NASDAQ:CSCO), The Coca-Cola Co (NYSE:KO), Electronic Arts Inc. (NASDAQ:EA), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), Southwest Airlines Co (NYSE:LUV) and other large international companies have put their trust in Globant to deliver innovative, nimble user experiences to customers all over the world.

Yet dig a little into the story and it makes more sense. With operations in eight countries, GLOB stock has its finger on the pulse of emerging social trends and the engineering prowess to integrate contextually aware, personalized experiences using Big Data and the Internet of Things.

It’s where commerce is going and Globant has become the clear leader.

Globant Looking Great

Globant got its start in 2003, when it was founded by current chief executive Martin Migoya and three friends. The small startup’s initial goal was to create software products, initially in Latin America. Less than five years later however, the company had already grown into a multimillion dollar, multinational corporation with clients all over the world.

Growth has been impressive. In 2010 the company had sales of just $57 million. By 2015, revenues were $253.8 million … and there is no sign of slowdown.

In August, GLOB stock reported second-quarter sales of $79.9 million, representing year-over-year growth of 31.9%. It guided analysts to expect $80 million to $82 million in sales for the third quarter. In a letter to shareholders, Martín Migoya, Globant’s chief executive and co-founder said:

“The market continues to rely on the growth of digital services’ demand, where we maintain our positioning as leader. This can be seen in a recent IDC MarketScape report, which recognized us as a worldwide leader of digital strategy consulting services.”

That is a good place to invest because IDC expects the worldwide market for digital strategy consulting will mushroom to $97 billion by 2019.

Better still, Globant is well-positioned in the fastest-growing part of the business. Digital related spend should increase from about 50% of all IT and business related spending to 80% as companies move briskly to the digital age where outcomes are measurable. For spendthrift business managers that is a big deal.

Michael Versace, research director at IDC makes the case:

“As digitization alters the nature of business, competition, supply and servicing operations, a growing number of organizations of all sizes and maturities will adopt elements of a digital strategy to create and/or maintain a brand, product, and operational advantage. As more firms adopt digital strategies, consulting engagements must contain a larger digital strategy services capability.”

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