Stock (Symbol) |
SS&C Technologies (SSNC) |
Stock Price |
$29 |
Sector |
| Technology |
Data is as of |
| January 2, 2017 |
Expected to Report |
| Feb 9 – 13 |
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) provides financial services software for institutional investment managers which provide fund administration, trading, record keeping, and performance measurement. Acquisitions are a big part of SS&C’s growth, with 44 in the last 20 years. SS&C recently acquired Advent (which I use to calculate client returns) 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 industry wide. The Citi deal made also SS&C the 2nd largest hedge fund administrator. More recently SS&C acquired Salentica, a CRM which works with Salesforce software. SSNC’s pricing structure bills clients a higher amount each year, especially if a firm’s assets under management increase. The recent strength of the stock market bodes well for SS&C as revenues could come in stronger than expected in the coming qtrs. As it stands now the company is expected to grow profits an average of 21% a qtr the next 4 qtrs — solid. And at just 16 times earnings it’s a value as well. But, I am a little worried about this stock because some money managers — such as Baron Funds — have recently sold their positions in this stock. Also, there might not be many more acquisitions that can be made. My Fair Value is 20x earnings, or $37. |
One Year Chart |
 Last qtr SSNC reported profit growth of 24% on 26% sales growth. The company beat the street by a little, as it has done the prior 3 qtrs. 2017 profit estimates declined a bit from $1.94 to $1.84, but 2018’s rose a little. Looking ahead to the next 4 qtrs, profit Estimates are for 22%, 22%, 21% and 17% profit growth. The stock has a nice P/E of just 16 compared to its Est. LTG of 20% per year. It’s hard to find 20% growers nowadays, especially ones that have record profits each year. SSNC seems like a solid stock on paper. |
Fair Value |
 I’m reducing my Fair Value from 22x earnings to 20x and still this stock has impressive upside. It’s strange SSNC isn’t higher than it is. Why did it decline the past two months? |
Bottom Line |
 SS&C Technologies is a worldwide leader in financial services software that money managers depend on to do their daily business. I use its Advent software, and pay a little more every year. The stock is on a pullback and with its P/E of just 16 has solid upside to my Fair Values. Still, questions remain such as how the company will keep acquiring and why did some money managers sell. But on paper things look good. SSNC ranks 27th of 35 stocks in the Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
27 of 35Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
