Stock (Symbol) |
SS&C Technologies (SSNC) |
Stock Price |
$58 |
Sector |
| Technology |
Data is as of |
| May 16, 2016 |
Expected to Report |
| N/A |
Company Description |
 SS&C Technologies Holdings, Inc. (SS&C Holdings) is a holding company. The Company is a provider of software products and software-enabled services that allow financial services providers to automate complex business processes and manage their information processing requirements. The Company’s portfolio of software products and software-enabled services allows its clients to automate and integrate front-office functions, such as trading and modeling, middle-office functions, such as portfolio management and reporting, and back-office functions, such as accounting, performance measurement, reconciliation, reporting, processing and clearing. Source: Thomson Financial |
Sharek’s Take |
 SS&C Technologies (SSNC) is a cloud based provider of financial services software, which it believes is the best financial technology in the industry. SS&C automates fund administration, trading, record keeping, and performance measurement for institutional investment managers. In fact, I use Advent software to calculate client returns and SS&C recently acquired Advent, as well as Primatics, Varden and Citi’s Alternative Investment Services. The Citi acquisition is important as alternative assets under management have been growing in the teens and this now makes SSC the 2nd largest hedge fund administrator. What’s nice about this company is it can raise prices and its customers don’t have a choice but to pay more — especially if a firm’s assets under management increase. Then SSNC does tack on acquisitions and profits grow even faster. SSNC stock had been a high flier for many years, opening at $16 in March 2010 and reaching a high of $77 in November 2015 as profits grew an average of 25% a year. I’ve wanted to own this stock for years and it was always too expensive. But since then the stock has fallen into the $50s as the P/E has fallen from the mid-20s into the teens. With an Estimated Long Term Growth Rate of 19% per year, SSNC is now undervalued and I will purchase the stock for the Growth Portfolio today. Now I have my buying opportunity. |
One Year Chart |
 SSNC had revenues up 67% last qtr, including acquisitions. Profits increased a robust 23%, beating the 20% estimate. Looking ahead, analysts estimate profit growth for the next 4 qtrs of 15%, 22%, 24% and 23%. These charts and tables were done on May 6th when the stock was $58 and the P/E was 18. So it seems the stock is low just as profit growth is accelerating. |
Fair Value |
 My Fair Value on this stock is 22x earnings, which equates to more than 20% next year and more than 40% by 2017. This is some of the best upside of any stock I own or follow. I do wish to point out SSNC had a 2-for-1 stock split last Friday and that isn’t shown here as the charts are from May. Next qtr I’ll update the info and include the split. |
Bottom Line |
 SS&C Technologies is a worldwide leader in financial services software that money managers depend on to do their daily business. The stock was a high-flyer for many years, and I feel the recent pullback is just the opportunity we need to get in. This stock has a 19% Est LTG yet sells for 16 1/2 times earnings after the Brexit selloff (around $26.50 on a post-split basis). I will add SSNC to the Growth Portfolio today where it will rank 20th of 39 stocks in the Power Rankings. |
Power Rankings |
Growth Stock Portfolio
20 of 39Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
