Sage Share Discussion Threads

[maddox] 27/12/2021 10:39

Yes, Sage is showing some remarkable strength against a 'risk-off' market backdrop. Managed to hit a 52 week high on Friday 24th Dec (851.08p).

Only two Brokers out of 21 have share price targets above the current share price Jefferies on 900p and Numis on 870p.

It also appears to have risen sharply with the share volume traded decreasing over the latter few days. I'm no Charting expert but to my amateur eye that looks like a very bullish signal - but I'll defer to those better informed on this?

Perhaps the buy-back programme is now finding holders reluctant to part with their shares?

[nhb001] 20/12/2021 14:46

OK. This is showing some serious relative strength to the market now. Hope I don't jinx it.

[robinnicolson] 15/12/2021 13:45

Nick Train wrote about Sage in the Finsbury Growth & Income Trust 2021 annual report:

Few companies in your portfolio have tested my patience like this one. Look at the long-term price chart. Time and again the shares rally toward the peak of c£8. But each time the shares slip back, because the company persistently contrives to disappoint against its apparent growth potential. Many similar accounting software companies around the world have been great investments over the last two decades – Sage egregiously not. Other holders – including one we admire greatly – have had enough and sold out.
We are still invested for two reasons. First, in 2017 the previous CEO boldly made an ostensibly very expensive acquisition; Intacct, a US cloud software business. Four years later, Intacct has grown and its future prospects appear better than ever. Even on its own Intacct is worth an appreciable proportion of Sage’s market value, we think. Next, the current executive team has boldly accepted a drop in profit margins by investing more aggressively in new product development and marketing. We must hope better late than never.

[maddox] 15/12/2021 10:43

Taras73,

Please provide a link.

Regards Maddox

[taras73] 15/12/2021 07:44

Yep the insiders clearly saw it too (the trend:) and sold more a million worth of shares on the 4th dec according to stockopedia

[nhb001] 14/12/2021 15:43

I think you may have jinxed it Maddox. :-))

[maddox] 14/12/2021 10:55

Sage is bucking the trend and looking remarkably strong in a very weak market. It suggests that we're seeing institutions buying into their transformation - literally.

[maddox] 19/11/2021 10:48

Thought I’d have a look at the Brokers Analysts recommendations which are fairly evenly balanced on Sage:

Strong Buy........5...(2)
Buy...............1...(0)
Neutral...........8...(8)
Sell..............3...(2)
Strong Sell.......4...(7) Brackets are the scores as at Jan 2020.
.................21..(19)
Source: Share.com

Their views have improved on a year ago but still somewhat cautious: share price targets are all under the current share price, with the sole exception of Jefferies on 900p. So, I think Sage IR have a bit more work to do to get their transformation story across.

Regards, Maddox

[p1nkfish] 17/11/2021 23:02

About time and shows the analyst predictions of a few months back were all way off mark. Nice one.

[contrarian joe] 17/11/2021 21:15

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.

[nhb001] 17/11/2021 16:06

It feels like a big corner was turned today. The acceleration of digitisation of SMEs has been confirmed again. SGE is well placed to benefit.

[wad collector] 17/11/2021 13:17

More relevant than comparisons with last yrs results are with the previous year. And looks like the pandemic never happened in terms of share price now.

[maddox] 17/11/2021 11:05

Mr Market seems to have liked today's results, with the shares up 35p (4.8%) to 765p as I post.

The top-line figs always look a bit mixed on a first look - as the business transitions into a cloud-based SaaS business. The decline in old-style licencing revenue and activities masks some highly positive growth particularly in H2. This momentum is anticipated to continue into the current year, so the outlook is positive.

A few highlights:

Annual Recurring Revenue +8%
Cloud Native Products +44%
Renewals by Value 99% (H2 c.101%) this is without any price increases.
Cash conversion 126% - driven by the move to subscriptions.

The star in Sage's product portfolio is Intacct aimed at medium-sided firms. In North America (USA and Canada) it's driving recurring revenue growth of 22% primarily through new customer acquisition. This is excellent performance in what is seen as Sage's competitively toughest market. Intacct is only just being rolled-out into other markets - if it can replicate the NA performance geographically it should have a big impact. Currently, 50% of Sage's revenue comes from the medium-sized business sector. So, something to keep an eye on.

With Sage Business Cloud penetration up to 67% from 60% last fin year the transition still has some way to go. However, the bright and shiny Cloud-based SaaS business is becoming more apparent and a very attractive business it's shaping up to be.

Regards Maddox

[nhb001] 05/11/2021 14:17

The real price action in SGE seemed to start immediately after the MPC decided to hold rates at midday yesterday. This may have caused financial institutions to recalibrate their DCF valuation formulas and that advantaged SGE perhaps? I am looking for confirmation of continuing strength in small & medium sized companies for digitisation and movement to cloud. The SGE management seem ultra cautious so some optimism would count for a lot.

[maddox] 05/11/2021 10:18

We're in the Closed Period in the run-up to 17 Nov results. However, Mr Market seems to be optimistic - looking at the last few days share price movements. With the buy-back programme providing a great opportunity for substantial weak holders, such as Terry Smith, to exit we should have stronger support should the results be good.

[spacecake] 30/9/2021 17:49

Global job cuts, message to staff below.

[amt] 28/9/2021 13:51

Good, nothing to worry about then.

[p1nkfish] 28/9/2021 10:26

Well they get to buy more back cheaper.

[danb45] 28/9/2021 09:47

No - other then it was Goldman Sachs - saw this on the LSE boards...

[nhb001] 28/9/2021 09:29

Thanks Dan. Do you have any details you could share?

[danb45] 28/9/2021 09:21

A broker downgrade to sell - target price 700p apparently...

[nhb001] 28/9/2021 09:13

Any ideas as to why the sudden lurch downwards this morning?