Phiadvisor's Enter Long signal on Linedata (LIN-FR)
Linedata is a €204 mn market cap and engaged in software editing for the finance sector. The group also offers consulting, outsourcing and maintenance services. Sales by application sector split between
asset management (64%), loans and financing (33%): loan management software packages, risk analysis and management software packages, etc.; savings and insurance (3%).
By geographies, revenue is achieved in Southern Europe (35%), North America (42%), Northern Europe (18%) and Asia (5%).
The company proved resilient in 2020, showing a stable net profit of €18m thanks to 80% share of recurring revenues.
The company is expected to resume top line growth in 2021 thanks to the asset management segment, while a progressive ramp up in operating margin is also a trigger for the stock rerating. The risk/reward looks interesting due to the undemanding valuation.
Short term catalyst : Co-sourcing in the US.
This signal looks consistent with the European Software sector, currently in Major Bullish Trend.