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SGE Sage Group Plc

-19.00 (-1.76%)
24 May 2024 - Closed
Delayed by 15 minutes
Sage Investors - SGE

Sage Investors - SGE

Share Name Share Symbol Market Stock Type
Sage Group Plc SGE London Ordinary Share
  Price Change Price Change % Share Price Last Trade
-19.00 -1.76% 1,059.50 16:35:20
Open Price Low Price High Price Close Price Previous Close
1,068.00 1,061.50 1,077.50 1,059.50 1,078.50
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Top Investor Posts

Top Posts
Posted at 09/8/2023 13:56 by maddox
Positive write-up in Investors Chronicle:

Comments positively on recent trading and growth in recurring revenue. Picks-out the success of Intacct especially in North America and Peel Hunt sees this as the main driver as it rolls-out Intacct into Europe. Mentions that investors are now seeing the value in SGE driving the valuation upto a p/e 27 - describes this as reaching the level of US peers [hardly - Intuit is on a p/e 63!].

Sage would be on a price of 2216p if rated similarly to Intuit.
Posted at 27/7/2023 11:28 by maddox
Q3 nine month update today. Growth is continuing and on-track for FY23 of 10% growth overall. No impact seen from macro-economic factors - interest rates/inflation.
The renewal rate is 101% consistent with past 18 months indicating a stable competitive environment.

Looking beneath the headline numbers - there are some positive growth drivers building momentum. Intacct US growth 30% and >40% in new territories - albeit from a low base. The launch in Europe has started well and I note Q3 growth was 7% up from 3% at 1H. The Sage Business Cloud organic growth at 28%.

Margins are targeted to rise - with 20.8% for FY23 and to continue widening thereafter. The aim is for SGE to be a 'Rule of 40' SaaS business.

In recent years, Rule of 40 has gained widespread usage as a yard-stick target measure of growth by investors in SaaS firms, first coined by Brad Feld. The Rule of 40 states that if a company's revenue growth rate is added to its profit margin, the total should exceed 40%. No breakdown offered on the mix today - and it'd be very interesting to know what their thoughts are?

The rationale is ofc that a SaaS Rule of 40 firm will command a premium rating, but again not stated, and on a p/e of 27 as mentioned above SGE is already considered highly valued in the context of the UK market.

Post script: Mr Market liked the results - new high 951p
Posted at 19/7/2023 08:57 by maddox
Sage is looking very strong - hitting new highs - yesterday and again today at 947.4p. Positive comments from Nick Train - talking about the undervaluation of UK shares as compared with similar firms internationally:

'Train, who invests in the London Stock Exchange Group, said that the negative sentiment meant there were opportunities to snap up “wonderful companies that are wrongly priced”, citing cloud-software provider Sage as an example.'

and in ii:

'Nick Train is not a value investor, but he argues that his portfolio is cheap.
The stock picker, who runs the UK share portfolios Lindsell Train UK Equity and Finsbury Growth & Income, is known for picking high-quality companies, with established brands that can keep growing profits. He has always been happy to pay a premium price for such shares.

But in his latest note to investors, Train says his portfolio is undervalued compared with similar international companies. He also says that the UK market as a whole is extremely cheap compared to other major stock markets.' 'But he argues that his companies are “outstanding” and priced cheaper, on a P/E basis, than American rivals. “Now, of course these pairs are not exact ‘like-for-likes'; just as Sage Group SGE is not an exact comparator for Intuit Inc INTU'
Posted at 19/5/2023 13:10 by maddox
The Chronic Investor IC 19 May 2023 Buy. 'Sage could be a counter-cyclical buy'

'Rather than just pushing back against the cyclical story, the top-line growth suggests that Sage could actually be a counter-cyclical story. Its momentum in the face of current challenges means the 2024 price/earnings ratio of 23.2 isn’t off-putting. We stick to buy.'

They also highlight the Cloud-native ARR grows at 30% driven in part by the performance of Sage Intacct.
Posted at 17/5/2023 09:42 by nhb001
You beat me to it Maddox :-)) Very positive investor presentation just ended. I wish all my holdings were looking as good.
Posted at 21/4/2023 14:59 by maddox
I'm a big fan of Terry Smith - he's an exceptionally smart investor. He took advantage of SGE's share buy-back programme to exit his position - which was a bit of an invitation to sell - considering they already had SGE under review. Nevertheless, he appears to have sold at prices below 650p (RNS 17Jan21 share price c.560p below 5% - May 2021) so at a pretty low point. At the time he did say that he felt INTU was the better firm in the sector.

Perhaps he'll have another look at the new-look SGE before he has to overpay? (Don't overpay is his second rule for investment)
Posted at 02/8/2022 09:03 by nhb001
Another strong update. I just listened to the investor presentation. The management sound more and more positive. One of the most interesting comments made by the CFO was that Sage are still seeing a wave of small & medium companies digitising their back office processes & Sage are benefiting from that trend. That wave is very strong and so far outweighing any other macro economic factors. Nice to have that continuing trend confirmed.
Posted at 12/7/2022 11:39 by maddox
The change in economic backdrop - inflation and interest rate rise impact. These changes cause a reappraisal of individual stocks as well as a devaluation of the market as a whole. It takes a while for this to take its course but eventually some stocks will be displaced to become laggards and new leaders will take their place.

Sage is well placed to become a leader. Essentially Tech but selling a non-discretionary product with an economic moat and thus pricing power. These are attractive characteristics for a tougher trading environment. If SGE can bring the underlying growth through, from beneath the legacy drag, then this could bring new investors on board. Once the market turns there will be a lot of cash looking for a new home.
Posted at 03/1/2022 13:57 by nhb001
Happy new year everyone.

I was wondering what people's targets are for SGE. Paul Hill (a professional investor who posts on LinkedIn & Twitter) who was invested in SGE has recently sold since it hit his target at £8.20. I find timing sells harder than timing buys (not uncommon I think) so I was curious what others views are on SGE.

My current view is to let this run as the market seems to be rerating it now. Also, see Maddox's comments about broker targets being less than the current price.

Also, as someone whose career was in software (including IBM) I have long wondered if the market really understands (yet) the possible benefits of a company moving to SaaS delivery. As well as the cost savings for vendors and consumers (less O/S & DB flavours to test & support, less installation and maintenance costs for consumers) there are also the more ephemeral advantages of access to customer data on the SaaS platform itself and the possibilities to monetise this with analytics & AI by the vendor.

Am I being too optimistic?

Best wishes.
Posted at 17/11/2021 21:15 by contrarian joe
Market seems to have taken to the results,maybe the organic revenue growth they predict for 2022 have woken institutions up.It remains to be seen whether they can deliver on that, trading on a forward p/e of 32 "feel there's not much room for error",so took some good profits today,hope it continues to do well for investors on here.

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