In theory, the board of a company can assess very carefully whether their own stock is fairly valued at the stock exchange. That is why it is considered as a strong signal when a company decides to buy back shares from there. Software AG plans to invest up to end the year up to 70 million euros in treasury shares. These are, depending on the course development, three to four per cent of the market capitalization. With cash of € 424 million at mid-year funding should not be a problem. A share buyback increases the demand for the title and therefore drives at least temporarily the course. not decided
Still, Software AG, exactly what it is doing with the collected papers: Will they scrapped that increases earnings per share – a favorite with the Anglo-American investors vote code. At the same time it is easier in the future with less share certificates, to increase our dividend. It is also possible that the shares from the buyback payments for employees or acquisitions are used. In this case the number of shares remains unchanged. As Software AG has pulped the papers with their recent buyback program, we see good chances that the Darmstadt will go the desirable from the shareholders’ point of view the way this time.
The signal of the buyback confirmed our positive view on the TecDAX listed value. We had promoted the Software AG already in issue 12/2015 on “Buy”. Through the general market weakness, although the paper was unable to establish since then, the trend in operating
But business is facing up. In the second quarter, earnings before interest and taxes rose by 33 percent and sales by ten percent – expect stronger than most analysts in both cases. The growing popularity of rental software had also set Software AG under pressure. Now, however, a turnaround is emerging.
SVP
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