Enterprise software stocks drove the stock market's growth for the first three quarters of 2018. Since Christmas Eve, the sector has returned to its hyper-growth nature, leading the market's bounce back. This high beta sector has become massive over the last decade, with new software companies still popping up almost monthly.
In a sector that has several stocks with P/S ratios above 20 with negative earnings, I believe investors should be selective in this area. To help with this, I believe investors should look for stocks with a P/S/G ratio below .4 (P/S ratio divided