It's hard to call the last few years a nightmare for BMC Software (Nasdaq:BMC)
shareholders, but dishwater-gray mediocrity doesn't seem so unfair.
Against a nearly 20% return from the Nasdaq, BMC has actually declined
about 10% over the past two years (though up almost 30% over five years,
and closer to the Nasdaq return), and has trailed peers/comps like CA (NYSE:CA), Compuware (Nasdaq:CPWR), and ServiceNow (NYSE:NOW) by a meaningful margin too.
The problem here is one that I've lamented before in the tech sector.
Although BMC converts a sizable percentage of its revenue into free cash flow (FCF)
and sports solid margins and returns on capital, the company's growth
has been lackluster due to an inability to change with the times and
establish competitive positions in new markets.
Now the story seems to be all but over for BMC as a publicly-traded
company. A consortium of private equity investors has put together a bid
that gives investors only a modest premium over the 200-day moving average
and would seem to undervalue the company's long-term cash streams. And
yet, this very well may be the best deal that investors can hope for and
a warning to investors in other cash-rich/growth-poor stories.
Please read the full article here:
http://www.investopedia.com/stock-analysis/050613/bmc-software-shows-again-getting-full-value-tough-without-growth-bmc-ca-now-ibm-vmw-cpwr-orcl.aspx
Showing posts with label Compuware. Show all posts
Showing posts with label Compuware. Show all posts
Tuesday, May 7, 2013
Monday, September 17, 2012
Investopedia: Does BMC Software Offer Durable Value?
I've said it plenty of times, but some ideas are worth repeating -
value-priced tech stocks seldom outperform in the absence of growing
investor confidence regarding growth or significant returns of capital to shareholders. While BMC Software (Nasdaq:BMC)
looks undervalued by many different standards, the company's growth is
unimpressive and there are growing questions about the competitiveness
of its product offerings. As a high-value buyout doesn't seem especially
likely, BMC is going to have to figure out a new path to growth if this
stock is going to work well.
Please follow the link for more:
http://www.investopedia.com/
Please follow the link for more:
http://www.investopedia.com/
Monday, June 25, 2012
Investopedia: To Unlock More Value, CA Needs More Growth
I've been a fan of mid-sized software company CA Technologies (Nasdaq:CA)
for a while now, but it has taken quite a bit of time for the Street to
appreciate it. A relatively recent willingness to share more capital
with shareholders (buybacks
and bigger dividends) has helped, but management really needs to
outline a clear plan to boost growth to close more of that gap between
today's price and the fair value suggested by the company's free cash flow.
Please read more here:
http://stocks.investopedia.
Please read more here:
http://stocks.investopedia.
Tuesday, January 10, 2012
Investopedia: How The Street May Care About CA Again
Trying to sell a cheap low-growth tech stock is often like trying to sell used electronics; sure, it's cheap relative to the value you can get out of it, but nobody is going to want it anyway. This is not a new problem for CA Technologies (NYSE:CA). While these shares do indeed look too cheap on even a conservative modeling basis, it's going to take leveraging the new mainframe cycle and showing growth in cloud computing, to get anybody to care.
The Good
CA Technologies has built itself into what is, in many cases, an indispensable part of the IT environment. This vendor-neutral enterprise and mainframe software vendor sells so many different products that it is not easy to talk about what they do in succinct terms. Nevertheless, here's a shot: CA Technologies helps make sure that an IT system can run multiple systems and applications, while maintaining performance and security. CA products also help monitor how well the system is working, identify problem areas and evaluate the performance trade-offs of new projects. (For related reading, see The Dotcom Crash.)
Read the full piece here:
http://stocks.investopedia.
The Good
CA Technologies has built itself into what is, in many cases, an indispensable part of the IT environment. This vendor-neutral enterprise and mainframe software vendor sells so many different products that it is not easy to talk about what they do in succinct terms. Nevertheless, here's a shot: CA Technologies helps make sure that an IT system can run multiple systems and applications, while maintaining performance and security. CA products also help monitor how well the system is working, identify problem areas and evaluate the performance trade-offs of new projects. (For related reading, see The Dotcom Crash.)
Read the full piece here:
http://stocks.investopedia.
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