Trading on 16 times this year’s estimated earnings, Standard sits on a substantial premium to the UK banking sector including HSBC, its most comparable rival. Standard has never tried to sell home loans to low-income groups in the US, a business HSBC made such a spectacular hash of. Neither has it invested millions in trying to poach investment banking business from the Wall Street bulge-bracket banks, another ignominious HSBC failure. It is much more of a pure emerging-markets play, and all the better for that.
The company is well positioned, and, if management gets things right, there should be a rich reward for shareholders from the money it is investing. At their current high level, it would be unwise to pile into the shares during the coming months because the price will probably consolidate for the moment. However, the shares are well worth holding. Think about buying again if the stock shows any signs of weakness. There was something of a rarity from Misys yesterday in that its full-year trading statement did not contain a bombshell.
It is the first time in years the software developer has released a fairly predictable set of numbers without the now-familiar profit warnings or executive departures. However, Mike Lawrie, the US technology veteran who took the helm at Misys last year following Kevin Lomax’s fall from grace, could have another trick up his sleeve. After securing the sale of the company’s Sesame division, another significant disposal could be in the offing after Mr Lawrie told analysts the company will “de-emphasise” its investment in its Hospital Systems division in the US, choosing instead to focus on the higher-growth Physicians Systems business.
A sale of the division could raise hundreds of millions of pounds that could be used to accelerate the company’s recovery strategy after years of under-investment in its product set. Misys is around halfway through a major restructuring programme and Mr Lawrie has replaced the entire executive team. He has refocused the company on providing services around its core software, something he has argued should have been done years ago. Read More info: www.esettlementagentsperth.com.au | Nomad Charters