View the article online at http://citywire.co.uk/money/article/a511457
Sage, CSR and Autonomy rise as results lift wounded tech stocks
A solid management statement from Sage Group (SGE.L) and a strong earnings report from CSR (CSR.L) sent both firm’s share prices higher, while Autonomy (AUTN.L) surged on upbeat results.
(Update) As Britain’s banking sector slumps further and its listed miners yo-yo, a number of UK technology companies are recovering.
A solid management statement from Sage Group (SGE.L) and a strong earnings report from CSR (CSR.L) on Wednesday sent both firm’s share prices higher, while Autonomy (AUTN.L) topped the FTSE 100 leader board on upbeat results.
Sage shares jumped 8p to 285p after the accounting software firm said trading for the nine months to 30 June were in line with expectations, despite an uncertain economic backdrop.
The shares have risen 10% in the past year, slightly underperforming the FTSE 100 and falling short of other tech stocks as Sage’s US operations struggled.
‘The statement provides confirmation that there has been no disaster and that the (problematic) North America, which is very much the swing factor for Sage by virtue of representing around 2/5 of the business, is still on course for a slow recovery,’ said Tom Gidley-Kitchin, analyst at Charles Stanley.
CSR, meanwhile, took on 10p to 301p after the chipmaker reported an expected 12% fall in second-quarter revenue and said strength in audio and automotive markets should support it against weakening demand for mobile phones.
Analysts at Jefferies International – which upgraded the stock to ‘buy’ earlier in the month – said that due to a lack of ‘hairiness’ in its figures and guidance, they saw the Bluetooth, wi-fi and GPS chipmaker ‘catching the benefit of the doubt today.’
In a research note, they continued: ‘As per our recent upgrade, we see continued progress on combo-chips as a catalyst for a sentiment sea-change.’
CSR shares have shed 22% in the past three months, underperforming its sector and the FTSE 250, after announcing a deal to buy US tech firm Zoran Corp in February.
The Schroder UK Mid 250 fund, managed by Andy Brough, owns 7% of the company. However, that isn't necessarily the endorsement it could be as, although Brough's fund has made 27% in the past three years, its performance is way behind the FTSE 250 which has achieved a total return of 48% in the same period.
The Jefferies analysts added: ‘Wireless headwinds are well-known and although Zoran still needs much work, a difficult chapter may be closing perhaps helping CSR back to peer-like valuation levels.’
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