Stock (Symbol) |
SS&C Technologies (SSNC) |
Stock Price |
$38 |
Sector |
| Technology |
Data is as of |
| August 22, 2017 |
Expected to Report |
| Oct 25 |
Company Description |
 SS&C Technologies 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. SS&C’s 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 |
 Alternative investments like BitCoin are all the rage in 2017. Nowadays large banks are even making investments in — and or putting their clients in — crypto-currencies. Hedge funds that invest in BitCoin-type investments look to SS&C Technologies (SSNC) — the biggest alternative-fund administrator in the world — to provide fund administration, trading, record keeping, and performance measurement to money managers and hedge funds in this growing industry that’s been growing in the teens industry-wide. SS&C is also the world’s biggest private-equity fund administrator, as well as the largest provider of financial software. The company grows primarily through acquisitions (and partially from raising software prices every year). SS&C has completed more than 40 companies acquired in the last 20 years. Last year it acquired Citi Alternative Investor Services (which tracks alternative investments), Salentica (a CRM which works with Salesforce) Wells Fargo Fund Services and Conifer Financial Services. Stocks like SS&C usually do well because they capture an industry then use profits to either acquire other companies (buying profits) or buying back stock. This company has grown profits every year since it went public in 2010 at a rate of 23% a year and analysts have an Est. LTG of 20% a year on the stock moving forward. With a P/E of 20 this is a very reasonable stock. Long-term this company could get acquired by a larger software firm or a private equity firm. |
One Year Chart |
 Profits grew 18% last qtr, which met estimates, but sales grew just 7%. Sales were up 19% last qtr with help from acquisitions. Later in the paragraph the CEO bragged the company paid off $208 million in debt, which I assume was last qtr. But GAAP net income was just $41 million last qtr. Annual profit estimates rose slightly this qtr. Qtrly profit Estimates are for 15%, 15%, 20% and 17% profit growth the next 4 qrs. I like the Est. LTG of 20% per year but SSNC needs more acquisitions to hit that mark. Good P/E of 20. |
Fair Value |
 My Fair Value on SS&C is 20x earnings, or $45 a share — 18% higher than the recent quote. Upside to 2018 is more than 30%. |
Bottom Line |
 As investments become more complex, SS&C’s software is what many money managers use to handle trading a fund’s recordkeeping tasks. Although the stock is near its highs, I think it’s undervalued and has good upside here. With the stock markets, bond markets and even alternative investments doing well, this stock is timely. SSNC ranks 26th of 33 stocks in the Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
26 of 33Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
