Sopheon Share Discussion Threads

[montyhedge] 31/8/2017 09:04

BrummySpot puts me off buying as well.

[brummy_git] 31/8/2017 08:54

Doesn't really change the facts &/or lopsided "risk-reward" structure though for existing shareholders. Once the convertibles are cleared out, hopefully sooner rather than later, then I will reassess

[brummy_git] 31/8/2017 08:10

The one thing that has put me off from buying, is the quasi dual class equity structure. The £2m+ 8% convertible, which is deeply in the money (exercise price of 76.5p by January 2019), is essentially allowing these holders to have all the future stock upside (excluding short-term dividends and votes), coupled with the better asset protection of being higher up the corporate structure (re liquidation) plus the greater certainty of being paid 8% pa interest.

This wouldn't normally matter, but the dilution here is actually quite material (approx 33%), and it always niggles me when ordinary shareholders are effectively being treated as an "second-class citizens". But that's me!!

[runthejoules] 31/8/2017 06:57

Great Ideas Update in SHARES magazine:

HALF YEAR RESULTS continue the solid organic progress at enterprise innovation management software specialist Sopheon (SPE:AIM). Another eight new licences were sold in the latter part of the six month period, taking the total to 28 versus 20 this time last year. Importantly, future revenue expectations are increasingly being de-risked with visibility on $20.3m of income for the full year to 31 December 2017. This is an improvement on the $17.5m when we first flagged this stock idea on 22 June at 330p, with $10.5m of that figure under recurring sales contracts. While the share price may not have moved much since our original article, nothing has changed in terms of the investment case. The shares currently trade on 14 times this year’s anticipated 24p per share of earnings, based on FinnCap forecasts. The broker has stuck to its 620p share price target, implying more than 80% upside on a 12 month view.

SHARES SAYS: Keep buying the Shares.

Have to say I wish they'd done their job properly and updated us to sell at 500p, but given it's low liquidity, low volume August and small cap £24.5m atm this may move the stock a bit higher.

They've also tipped XAF... which I sold out of at breakeven last night (facepalm, should have waited to see what was in it)

[chadders] 30/8/2017 22:28

I'm sure they will introduce a divi now that they are generating significant cash. I would have thought the discussions will be on the level of payment now that they've gone public.

[wapit] 30/8/2017 21:52

Agree it's very cheap, don't think the board should have mentioned thinking about dividends. Either they do it or don't.Expecting eventually a turn and run back to 400p..

[chadders] 30/8/2017 15:32

Must admit I have no idea why the drip drip downwards since the half yearly numbers. It's a rapidly growing, very profitable tech company and market leader to boot. Growing cash pile, large tax losses to offset and about to introduce a dividend. Visibility already over 20 million and a very busy pipeline that includes several potential blue chips. From the report,

"Full year revenue visibility for 2017 from contracted business and recurring revenue streams is already at $20.3m. In addition we have a growing sales pipeline, including several blue chip companies representing major enterprise opportunities. These positive factors give the Board confidence in meeting our goals for the year, and as importantly, our ambition to accelerate growth in the future. Given these circumstances, the Board is actively considering the introduction of a dividend policy".

Current capitalisation is a little above twice the cash. Broker forecast reiterated at £6.20.

Added a few at £3.24 .....cheap as chips.

[mmc71] 25/8/2017 11:22

I don't actually follow NT's sell if it goes down a few pence rule on new purchases. I typically look for 20% upside on any purchase, with a 10% max loss - although you have to be a bit flexible for stocks where the spread is 5%+. So i don't think i'm trading any more than is normal/necessary.

Good luck with BUR. Am long on that although its nearing my 10% loss threshold so hope it picks up soon. That being said i'd imagine there'd be quite a push off 1000 as thats a key psychological number so it might be one to be flexible with. Maybe i'm more swordfish than shark :)

[runthejoules] 25/8/2017 11:14

I must guess mmc that you're trading at higher volumes than I am so transaction costs do bite for me. Difficult to know when you're obeying the Naked Trader's rule to get out quick if something starts going down and when you're obeying his rule not to overtrade. You don't know until it's gone down! I am already in most of the stocks I want to be in bt in too-conservative proportions. I've just bought the dip on BUR though, see how that works out.

[mmc71] 25/8/2017 09:34

runthejoules, i've not read his books, but have attended one of his seminars. The 2 key things i got out of it were how to find and research stocks, and secondly the kind of psychology to adopt to give you the best chance of success.

And the 2 go hand in hand - its a lot easier to become ruthless with underperforming stocks in your portfolio if you already have a list of potential stocks to buy just waiting for some free funds to do so.

[wjccghcc] 25/8/2017 09:29

So do the diluted brokers forecasts. PE now 15 dropping to 12 next year after dilution which is in a year of consolidation and investment before moving to the next level. Been buying back a lot of mine sub 350p as you'll never manage to buy back once things start moving.

[pj 1] 25/8/2017 09:11

It looks like Stockopedia accounts for the convertables at 10.2 m shares?

[hawaly] 25/8/2017 08:57

A re statement of a previously made point, may not be comfortable but nonetheless needs to be considered..... GLA


"Dilution - this is a very important point. If you ignore it, you'll value the shares incorrectly. The company has convertible loans in issue, which are deep in the money, at a conversion price of 76.5p per share. Therefore this is likely (almost certain actually) to lead to about 2.6m new shares being issued, which would increase the total shares in issue to about 10.0m.

Therefore investors need to ensure you properly adjust EPS, and market cap accordingly."

From Paul Scott's Small Cap value Report - here:

[runthejoules] 25/8/2017 08:44

It's interesting mmc71, I've read Naked Trader's books a few times but just can't seem to change my personality to shark mode. Still, we're at 445 now and it seems like maybe I should be more like the SCSW guy and old on for a possible takeover or good news out of the blue. Too fatalistic. Maybe I just need to drink more coffee, shave my head and eat more twixes! It's a good company, it's not going to zero... Good luck all...

[mmc71] 24/8/2017 19:44

westcountryboy: "Interesting to read the perspective of traders on the board. It would never occur to me to sell a stock on the basis that it might get cheaper on momentum grounds!"

In years gone by i'd have probably averaged down at this point... and then have losses mount up (assuming it continued drifting lower) or at the very least have double the funds tied up waiting for it to get back to break-even - due to the psychological effect of it...

But i now take trading a lot more seriously and treat it more of as a business than as a hobby and rule no 1 is don't get emotionally attached to stocks. Cut losses before they become an issue. The longer you leave it the more difficult it becomes to sell.

Trade like a shark as Naked Trader would say!

[dontshoutatonce] 24/8/2017 19:44

sams. interesting. Any other reasons they might sell do you think?

[samsj] 24/8/2017 17:53

Would it make sense for Planview or Planisware to buy Sopheon? Why were directors buying when already up to their eyeballs in stock and loan notes and knowing there would be no chance on selling much with the liquidity on AIM? Mence now 64 years old with millions of dollars stuck in Sopheon. eswcapital seemed to be looking around in 2015.

Sopheon will not be a public company in two years, that's my bet. Patience will pay.

[bamboo2] 24/8/2017 16:50

Took profit today while some liquidity was showing. Will be back I expect. gla

[zipstuck] 24/8/2017 16:47

There has been step increase in admin staffing overhead so with some big deals pending and $20m already in the bag for this year the overall profitability will increase substantially in the next half.

I'm not selling. I expect some buy notes.

Would not be surprised to see it a bid target at these levels.

[westcountryboy] 24/8/2017 14:58

Interesting to read the perspective of traders on the board. It would never occur to me to sell a stock on the basis that it might get cheaper on momentum grounds! Also I think Paul Scott's mention of the convertible loan issue has had an effect, though it's hardly a secret - and there is only £1.94m of loan stock left.

There's been very little analysis here of the actual results and particularly the cashflow which is excellent: now up to $6.6m cash. Also I don't sneeze at 10% revenue growth if it's achieved by a broader and less lumpy client base.

In retrospect the shares got too high after last year's results which included some one-off boosts. But I can't see any grounds on fundamentals for thinking this is now expensive vis a vis growth prospects. I am assuming about 50c eps FY. This seems cheap at the price.

[mmc71] 24/8/2017 14:25

I actually ended up selling the rest at an average of 360ish, so no i wasn't quicker than anyone else! But like you there are plenty of other opportunities around and i'd rather have my money invested in shares that are in an uptrend rather than drifting lower.

This is a good company and the price will eventually bottom out, but i wont be investing in it again until its clear that the trend has reversed.

Plus its got rid of the biggest loser in my portfolio which is always a good thing.

[runthejoules] 24/8/2017 13:36

Not a daft idea mmc71 if you were quicker than the rest of us. If you can't buy them back at 325, put them in something else! Plenty to choose from!

[mmc71] 24/8/2017 12:58

Sold half my holding today. Is a gamble but i reckon i'll be able to buy them back around the 325 level before too long. Can't argue against the 6 month price trend which is in total disconnect to the actual value of the company.

[penpont] 24/8/2017 11:56

Finncap summary via Research Tree:

Interims are in line with expectations and the strong performance track record evident since 2015. 9% revenue growth (all organic) was strong even compared with a strong 1H16, which had been boosted by a notably large deal. 28 licence orders (1H16: 20) indicated strength in a greater volume of more typically sized licence sales as well as associated maintenance and services, with regular deals de-risking reliance upon delivery of particular contracts. Demand for Enterprise Innovation Management software and solutions is growing, with awareness amongst potential customers leading to increased activity. With visibility of FY revenue expectations at 78%E (FY16: 79%A; FY15: 72%A), underlying board confidence in continuing growth (revenue and profit and cash) is further expressed through consideration of a prospective dividend policy. We reiterate our 620p target price, still only equating to 9x FY17 EV/EBITDA, en route to a peer group multiple of potentially twice that.