The Sage Share Discussion Threads

[maddox] 15/7/2016 00:31

Another good day for Sage investors as it has closed at another high at 655.5p.

A couple of interesting updates on the broker forecasts, JP Morgan Cazenove have re-iterated their 'Overweight' recommendation and upped their share price target to 700p from 670p.

Whereas, Credit Suisse have also re-iterated once again their 'Underperform' recommendation. However, it is worth noting that their share price target has also been increased to 600p from 560p of only 4th July. A year ago their recommendation was also 'underperform' and share price target 420p - so they've managed to increase their target by a whacking 43%!! So they haven't done their advisory clients any favours - being consistently well behind the curve.

Regards, Maddox

[maddox] 11/5/2016 21:24

Ok so that's the brokers views so FWIW just run my own numbers and my share price target from now until 31 Dec 2016 is 675p.

Regards Maddox

[maddox] 05/5/2016 22:08

First Half Results - the highlights: Operating performance
‒ Improved organic revenue growth to 6.2% (H1 2015: 5.0%), achieving double digit recurring revenue growth of 10.0% (H1 2015: 8.1%);
‒ Accelerated software subscription growth to 35.3% (H1 2015: 25.4%) in line with planned transition and corresponding decline in SSRS revenue of 6.3% (H1 2015: -2.0%);
‒ Customers embracing closer relationships with a 50% increase in subscription contracts to 842,000 (H1 2015: 561,000);
‒ Strong results in Europe, North America and Africa were balanced by a slower performance in Asia, which benefited from non-repeating revenues in the prior period.
- An 8% increase of the interim dividend to 4.80p.
- Underlying cash conversion of 111%.

So the 22p drop in the share price is surprising and I presume in response to the fall in margins from 28.2% (full-year 2015) to 25.4%. However, this fall was flagged and due to an increase in marketing spend. The full-year target of 27% operating margin remains in place and the CEO and MD repeatedly stated that they are confident of hitting it and 6% revenue growth.

So IMHO little to be concerned about, in fact there was much to be optimistic about in these results. The transformation of Sage appears to be working albeit it's too early to be evident in the top-line figures. Growth in new product sales (all priced on a SAAS model)look very encouraging but primarily customer conversions rather than new customer wins thus far.

Also, this decisive transformation is causing some collateral damage with office closures and a shedding of staff in non-strategic areas. Seventy of the top one hundred staff have changed with thirty new recruits to execute the new strategy.

So with Mr Market taking a different view to my own I'm tempted to pick up a few more.

Regards, Maddox

[thomasthetank1] 05/5/2016 11:21

Read Panmure Gordon & Co's note on SAGE GROUP PLC (SGE), out this morning, by visiting hxxps://www.research-tree.com/company/GB00B8C3BL03
"The wise guys Interim results headline with a small beat at revenue, in line profit, but a strong bounce back in the US performance. All in H1 which should replay the ‘it’s getting better’ theme – although Sage will stress that it is still “at the foothills”... While the shares look expensive on an earnings basis (PE 23 x) we think that ..."

[thomasthetank1] 11/4/2016 12:14

Read Panmure's note on Sage (SGE), out this morning, by visiting www.research-tree.com …
“On 30 April, Intuit (not covered) closes the sales of its Quicken personal finance software unit to H.I.G. Capital, a PE firm. Financial terms were not disclosed. Last August, Intuit told customers it was unloading three parts of its business -- Quicken, QuickBase and Demandforce – to focus on its most profitable software and services, shed its PC roots and become a cloud software company. “We try to live up to being a 33-year-old start-up,” CEO Brad Smith said telling us that strategically Intuit is accelerating its migration to SMAC. This is the kind of bold move which we would expect Sage should start to consider – despite its current narrative of not ‘end-of-lifing’ products. We retain our ... recommendation on Sage due to; (i) a patchy Euro outlook, (ii) the valuation, and (iii) Conway’s Law…”

[maddox] 27/1/2016 14:22

Q1 Trading Update today - basically in-line and on target (i.e. 6%, Op margin 27%), with Group organic revenue growth up at 6.6%. The transition to subscription billing and away from software licence sales is continuing, which has the effect of depressing revenue growth in the short-term. So, all good, no slip-ups and strategic plan being executed - just what I hoped/expected.

However, what is interesting is the market reaction to this update - share price up 37p to 604.5p (6.5%)as I write - against the backdrop of a very nervous market. It strikes me that the scepticism is waning and Sage's attractions are starting to become more apparent to Mr Market.

So anyone that took advantage of the recent turbulence to get in at the 550-570p range will find themselves with a nice short-term gain of 6% plus and the final dividend of 8.65p xd 11th Feb in prospect.

[maddox] 19/1/2016 16:53

Sage Group plc (LON:SGE) was upgraded by equities researchers at Bank of America to a “buy” rating in a research note issued to investors on Monday, Analyst Ratings Net reports. The firm presently has a GBX 660 price target.

Blackrock have just increased their holding above the 5% threshold.

[maddox] 07/1/2016 13:39

With the shares sharply down today on China worries now at 568.5p lets have another look at the Broker recs (courtesy of Digital Look). The price is now 30p higher than the last time I posted opinions despite the fall today (previous recs in brackets):

Strong Buy - 4(0)
Buy - 3(3)
Neutral - 6(5)
Sell - 1(0)
Strong Sell - 5(3)

We have 19 opinions rather than 11 last time and sentiment appears to be far more positive if overall there is still a clear polarization of views. So, with sentiment moving towards a positive outlook; the shares recently trading 8% higher(up to as high as 614p),I'm seeing this as an opportunity to top-up.

There is also have a trading update on the 27th Jan and ex-div 11th Feb for an 8p div, to stimulate interest.

Cheers Maddox

[maddox] 10/12/2015 11:56

USB reiterate sell recommendation and 490p share price target.

Regards, David

[maddox] 07/12/2015 13:20

Hi brain smiley,

Absolutely, not least many of the analysts following them, as I've been posting up. Some of them are extremely negative. It does make you wonder what your missing??

Regards, Maddox

[brain smiley] 07/12/2015 11:30

It can be de-rated as well.Plenty of sceptics of Sage and other suddenly high PE stocks.I think this is a bubble.

[maddox] 05/12/2015 22:56

hi brain smiley,

Yep this is what a re-rating looks like, the numbers improve and the rating the market places on them increases too - a favourable double whammy!

Regards, Maddox

[brain smiley] 04/12/2015 12:38

2016 PE of around 22.3.The market has gone mad.