Autonomy Takes a Poke in the Ribs
March 29, 2010
I saw a news item on Yahoo a few minutes ago (March 28, 2010, 2 pm Eastern), and I wondered it the item were accurate. The news story “Shares of Autonomy Appear Overvalued” may be little more than the stuff flowing from a disgruntled analyst struggling with a wrinkled shirt. Potentially negative financial news becoming available on a Sunday is not the same as a negative story fired out before trading begins on a Monday. At any rate, the story reports that the financial publication Barrons has done some tea leaf analysis and concluded that “the Britain-based software maker may now be overvalued and set for a pullback.” For me, the interesting comment was:
Given its modest returns on invested capital and “granting it some premium for improving returns, a multiple closer to its organic earnings growth could trim shares by roughly 20 percent,” the report said.
I will now try to chase down the Barrons report and make sure I keep an eye on Autonomy’s response. I thought the company was taking other search and content processing companies to school. Even OpenText, which has had a somewhat similar approach to generating growth and buzz, has not impressed me as much as Autonomy.
Stephen E Arnold, March 29, 2010
No pay for this one. I will report no dough to the SEC, an outfit on the alert always for financial silliness like working for no money.
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¿Cui prodest? (Who benefits from this?)
Could Autonomy be on sale? Buyers needing lower share price?
Is there any other future?