SSNC - Embedded Expectations Analysis - 2020 01 17
SS&C Technologies Holdings, Inc. (SSNC:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 19.8x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, and management may be concerned about DST, profitability, and Eclipse platformsSpecifically, management may be overstating their confidence in Black Diamond and the potential of DST to improve growth and realize cost synergies. Moreover, they may be concerned about their investments in the Asia Pacific region, and they may lack confidence in their ability to improve profitability in their Investrack and Algorithmics businesses. Finally, management may be exaggerating the quality of their talent pool, and they may lack confidence in their ability to create multiple Eclipse platforms that use different levels of sophistication in order to offer different price points
SS&C Technologies Holdings is a holding company. Through its subsidiaries, the company is a provider of software products and software-enabled services that allow financial services providers to automate business processes and manage their information processing requirements. The company provides its solutions to clients principally within the institutional asset and wealth management, alternative investment management, financial advisory and financial institutions vertical markets. In addition, the company's clients include commercial lenders, real estate investment trusts, corporate treasury groups, insurance and pension funds, municipal finance groups and real estate property managers.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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