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TECH STRIKES BACK! (0849 GMT)
Quite a spectacular rebound for European tech stocks this
morning!
The sector's index is up well over 2% about 30 minutes after
the opening bell, which suggests many traders believe
yesterday's retreat was somewhat overdone.
I have bought in here based on good recent momentum.
Sage today reporting 1.1bn shares in issue, after cancelling 0.02bn which were held in treasury (where bought back shares go). With 0.076bn left in treasury, they give the current total voting shares at 1.024bn, slightly higher than the LSE figure.
If they have funds to buy back another 24 million, they can get that voting total down to a nice round number ( :
"770 an easy target in the next week or so" - Darren, a week ago.
What's it doing next week Darren? Lottery numbers? ( :
Closed another short just now at 81 from 801. Will rinse and repeat if get opportunity. Anything above 800 I think is a sell.
But to be honest only got 9 pips which is less than I hoped for. Triple witching today so trying to sit this one out although am tempted to try again at 803.... I think it needs a retest of 740 before it can go much higher personally.
Mr Market seems to have liked the results, with the shares up to 790p 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 shinny Cloud-based SaaS business is becoming more apparent and a very attractive business it's shaping up to be.
Regards Maddox
Jeffries upped their target price to £9 today, but Darren's short seems smarter in the "short" term. Well timed, sir!
Worth noting that Sage are in the middle of yet another round of share buybacks. Still over a billion in issue though!
Goldman Sachs downgrade a couple of months ago looking somewhat embarrassing! The results could arguably be interpreted as unimpressive in isolation, but it's the way the company is positioned for a phase of strong growth which is attracting buyers. It was unusual to see the price rising all day, rather than the typical surge and fade.
Am short from 800.4 at close. Think this has gone up way too much on what was not amazing news. Might be wrong but I see 770 an easy target in the next week or so. Let's see.
Really good news on share price
More or less a bullseye on the consensus for revenue, and it really looks like Sage have invested wisely in their future. Well positioned for a push upwards now in margins and revenue, hopefully EDITDA and SP too!
Dividend of 11.63p due 10th Feb, yield is about 2.3%
Sage have consensus estimates on their website:
https://www.sage.com/investors/investor-centre/consensus-estimates/
September predictions look to have been way off
Thanks, will be back in around 580-620 on a sell off.
GS downgraded to sell, target price 700p. A bit overdone....
Deja vu? here comes the sub £6 accumulation phase perhaps.
Any news out there re move down or just profit taking after strong rebound?
My holding is minimal now with a very low average cost to me. Been a fantastic ride. Any sub £6 again I will be all over SGE like a rash.
GLA
Well, its been a great hold for me and have returned a good profit.
Decided to cash in and will recycle the monies into a couple of healthy divi paying companies on any Autumn correction or drama.
Well it’s been a while and I hope this share has further to go but I’m now out with a reasonable profit and trying to build it a bit quicker elsewhere. Good luck, I may be back
Nibbling 700p.
Still plenty of upside left and a great growth stock to offer balance in a dividend based pf.
Didn't show that very clearly did I, 1Million share and £ 7 Million in money on the shares !!
That’s a big amount of buybacks yesterday, more than one Million and the share price is ticking up slowly