Sage Share Discussion Threads

[p1nkfish] 08/4/2021 16:35

Oh - don't follow but good luck with it if you do.
DBAY bought off Dir at 150p, results soon and looks like a roadshow type of talks due - for one reson only - to drum up share support.

SAGE - I think they are tidying up for a sale and hence the Swiss non-core disposal, or, they are tidying for a purchase within their core.

Either way they are reducing distractions for a reason that should be value enhancing overall imho. DYOR etc.

[b1nky] 08/4/2021 16:26

Just followed you in to ANX. I like it!!!

[p1nkfish] 08/4/2021 13:52

Lovely!
Good to see and I suspect it will hold a fair amount of these gains this time. DYOR etc and GLA.

Took a position in ANX same time and expecting that to pop-up in next 2-6 months if I have my ideas straight - don't buy it, just my whitterings, pleased SAGE did as expected and hope the same for ANX.

[b1nky] 08/4/2021 13:27

Told yer!!!!

[spacecake] 01/4/2021 16:34

It's on it's way, buybacks ?

[rolo7] 01/4/2021 13:58

Breaking out here?

[essentialinvestor] 29/3/2021 16:34

amt, point taken, luck with your holding.

[amt] 29/3/2021 08:52

Sorry I meant dividend doubled.
EPS up 50%
Whichever way you look at it that's not slow growth for a very large company

[essentialinvestor] 29/3/2021 08:26

Analysis is overstating it!.

Underlying EPS in 2010 was 19.8 pence a share.

How has that ..nearly doubled?.

[amt] 29/3/2021 07:44

Essential Investor. EPS almost doubled in ten years and pe of 21.
I think you need to work harder on your analysis.
Hardly a chunky pe and definitely not slow growth.

[nhb001] 21/3/2021 11:49

Sage's cloud customers are located on Microsoft Azure are they not?

[spacecake] 20/3/2021 09:21

TV ad last night, first one I have seen in ages, far better use of cash than buying back shares IMO. HQ on the move again moving from Gosforth great park to Cobalt business park. On the same site is what used to be called cobalt data centre, now called Stellium -
It's interesting to think of Sage's move to the cloud and them moving next to a very large facility (the UK's largest purpose built campus). However, would they want to own their own equipment ?

[essentialinvestor] 17/3/2021 16:02

Sage has been low growth for 10 years.

However it remains on a chunky forward multiple.

Question is, can they reignite growth?.

[spacecake] 17/3/2021 15:58

The share price is below where it was 5 years ago, the customer move to cloud subscription model is slow, very slow.
Buying back shares to stuff into the company treasury so that they can redistribute them to themselves though option schemes ain't going to fix anything.

[nhb001] 17/3/2021 15:04

It's getting a right kicking today.

[nhb001] 16/3/2021 07:41

My thoughts are I hope you are right!?

[maddox] 15/3/2021 23:23

Whether buy-backs really make sense for shareholders depends on two critical points, specifically:

aa> The shares repurchased must be trading at a price below their intrinsic value; AND,

bb> There is no better internal use of the cash that would generate a higher return.


A very timely analysis just appeared on Yahoo Finance by Simply Wall Street:



They've produced a DCF valuation of SGE. Based on their combining of broker forecasts and their own future projections they calculate the current fair value share price of SGE to be 731p - so a 21.3% premium to today's close of 587.8p.

This suggests that yes, the buy backs are being purchased at below intrinsic value. But there is still the second test: Is there better internal use of the cash?

The rationale for this second question is that in handing back the cash to shareholders they will then need to find a new investment. In making a new investment an external investor will almost certainly be buying in at a premium whereas a firm's internally recycled cash is invested at par value. So it makes better sense to re-invest it rather than return it.

SGE has already been making additional investments in its products, its cloud infrastructure and its marketing; also it doesn't appear to need any further bolt-on acquisitions to round-out its product set. Quite the reverse, it has been divesting its geographic implementation capability as it moves towards a local partner model. It has also sold-off its non-core activities such as payment acquiring (SagePay). SGE therefore does appear to have surplus cash that the best use of which is to buy back its own shares that are trading below current intrinsic value.

There is of course a potential kicker here, if that current intrinsic value calc doesn't reflect the improving prospects from SGE's transformation. The current buy-back programme might also signal that SGE's transformation investment cycle is at an end and management are now looking towards future organic growth returning, which is not reflected in the current share price.

So, what are your thoughts?

Regards Maddox

[bengrady] 09/3/2021 17:27

Thanks Binky, Many thanks for your reply. I was hoping your reply would be along the lines of your reply.

[b1nky] 09/3/2021 15:12

Bengrady. Apologies just seen your question. Yes. Same calculation. If they are held in treasury. The free float goes down. Basically less shares floating around squeezes the price up over time. All other things being equal, of course!

[nhb001] 09/3/2021 09:14

Do you have a link you can share to those positive reviews? Thanks

[bengrady] 07/3/2021 16:40

Binky, the announcement says that the bought back shares will be held in treasury meaning they will not be cancelled. Does your calculation of the increase in share price apply in this case as the number of shares in issue is not being reduced?

[davwal] 05/3/2021 08:02

Well they aren’t hanging about. It'll be nice getting the regular rns confirming recent trading volumes of the buy back.