The latter course has been a working strategy for Progress Software (PRGS), which is due to report fiscal second-quarter earnings results Thursday after close.
Although Progress shares have traded flat over the past three months and are up just 5% on the year, against more than 11% gains for the iShares North American Tech-Software ETF (IGV), these shares look attractive, given the company's track record of doing deals that grow revenue and profits.
So, while Progress stock isn't cheap today at 38 times earnings, compared to a P/E of 21 for the S&P 500 (SPX), that doesn't mean shares can't head higher, especially with clear signs that Progress will be able to deliver market-beating numbers in the quarters and years ahead.
The Bedford, Mass.-based company specializes in real-time data management software. Whether on corporate networks or on remote cloud sites, Progress wants to simplify how business software is created and used. Its software simplifies complex tasks and allows software developers to build programs that work on any platform or device.
The company has reversed plummeting sales, which fell .44% in 2014, to where full-year 2015 projections suggest better than 26% year-over-year growth.
The secret to Progress' quick turnaround lies in its acquisitions, which are already paying off.