Sage Share Discussion Threads

[p1nkfish] 28/1/2022 10:25

Almost on purpose.

[nhb001] 28/1/2022 10:11

It finished on the 24th. Immaculate timing.

[p1nkfish] 28/1/2022 09:34

Buyback stopped?

[maddox] 27/1/2022 11:39

Mr Market goes through these gyrations - nothing specific to SGE as far as I can see - just gives an opportunity to buy at better prices. But if anyone can offer things that we should be concerned about please flag-up?

[nhb001] 27/1/2022 10:46

Well that was brutal. I think the market just moved the goalposts.

[maddox] 26/1/2022 09:07

Yes, positive update, implied growth in Annual Recurring Revenue (ARR) from 7% in last Qtr Q4 to 8% in Q1. So, the uptick in growth in H2 momentum is continuing driven primarily by the +44% Cloud Native products and new customer acquisition. The operating margin is starting to widen and expecting this to continue.

Top line figs reflect the transition away from legacy products, licence billing and services revenue. The impact of which will shrink over time.

[nhb001] 26/1/2022 07:54

Continued good progress reported today in the Q1 trading statement. I noticed that a Canadian pension fund has recently gone short. That makes a total of nearly 1.5% of the companies stock that will have to be bought back at some point. Although I suppose that's counter balanced by the end of the buy back program.

[wad collector] 12/1/2022 10:44

When you look at the strong share price performance in 2021 , it almost exactly mirrors the weak 2018 performance. So are going to see a continuing saw-tooth pattern with a plunge to £6 in 2022? Hopefully not...

[maddox] 03/1/2022 17:39

Taking the 31 Dec close 852.6p and a twelve month view (582p) we have seen a 270.6p share price rise or 46.49%. Add-in the 17.37p of dividends received in the period and that makes for a 49.47% total return. Then on 13 Jan we will qualify for the 11.63p dividend - paid 10 Feb. So a very good performance but what of the future?

Sage's SaaS transformation has yet to deliver. When it does we should see strong organic growth and widening margins. That's a heady mix that will justify a higher rating - but on better fundamentals than we have currently - so Sage is a solid hold for me. But price targets ain't my thing.

Wishing all holders a Happy and prosperous New Year!

Maddox

[nhb001] 03/1/2022 13:57

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.

[p1nkfish] 27/12/2021 19:00

If it breaks out on demand > average, fantastic.

[maddox] 27/12/2021 17:37

Hi p1nkfish,

Well we'll soon see. I understand the interpretation of the reducing volume is that it reflects a lack of sellers - the MMs then have to move the price up to entice some to sell to satisfy buyer demand. It's indicative of a potential breakout.

However, happy to be corrected on this by a Trader.

[p1nkfish] 27/12/2021 12:50

Sharp price increase on increased volume is better.

[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.