| Sector |
Software & computer services |
Last closing price
(06/04/2009) (p) |
121.25 |
| 52 week High/Low (p) |
181.5/78 |
| Market Cap (£mn) |
681.01 |
Sector weight age by
Market Cap (%) |
4.59 |
| Average Volume (mn) |
3.07 |
| P/E ratio (TTM) |
6.71 |
Industry P/E
ration (TTM) |
4.36 |
TTM: Trailing Twelve Month
Daily chart (MSY.L)
Business background and investment rationale
Misys PLC develops, manages and licenses a variety of software products and solutions to customers in the financial services and healthcare industries. The company’s business sectors consist of Banking, Treasury & Capital Markets (TCM), Healthcare and Central Services.
AllscriptsMisys will benefit from US stimulus package
Last year Misys completed a merger with Allscripts Healthcare Solution PLC in the US, creating AllscriptsMisys Healthcare Solutions Inc, of which Misys owns 56.7%. The newly integrated company is among the largest providers of electronic health records and practice management solutions in the US and has a client base of nearly one-third of the nation’s practising physicians. AllscriptsMisys also provides information and connectivity solutions to more than 150,000 physicians, 700 US hospitals and nearly 7,000 post-acute and homecare organisations. AllscriptsMisys is perfectly positioned to capitalise on the US$20bn in federal subsidies and incentives to widen the adoption of electronic health records, which represent the largest source of the company’s revenue. The firm has seen a five-fold increase in subscribers to it’s Allscripts ePrescribe electronic prescribing software in the months since the federal government announced cash incentives for the technology’s use by physicians.
Resilient performance by banking division in economic downturn
Misys Banking serves 1,200 banks and financial institutions across 120 countries. With strong recurring revenues and a focus on tier two and tier three banks and financial institutions, the Misys business model is proving resilient in the current economic environment. In an interim result announced in January 2009, total revenue was £84m representing a climb of 5% on last year. Total order intake was £44m, up 4% compared to the same period last year. Initial Licence Fees (ILF) revenue rose by 14% at £23m, reflecting higher ILF order intake in the current period (up 1% at £21m). Misys Banking had a strong first half securing 12 new business wins and implementing 136 ‘go lives’, demonstrating the mission-critical nature of Misys products and solutions.
Technical outlook
On daily chart, Misys is forming a double top between 131.0p and 100.0p and is trading way above it’s 52 week low of 78.0p. It is making a positive slope from the November 2008 low, which is an encouraging sign. Stock has strong support near 110.0p and resistance near 131.0p and has to hold above 117.0p for higher move. MACD (moving average convergence/divergence) is positive and 12 day EMA (exponential moving average) has cross below 26 day EMA indicating weakness in uptrend. 14 day RSI (relative strength index) is near 50 showing strength in trend. 14 day positive DMI (directional moving index) is above 14 day negative and DMI is near 20 indicating consolidation. Stock is also above 20 day and 50 day EMA which supports strength in trend.
Trading strategy
The stock can be bought around 117.0p with a profit target 130.49p and stop loss of 111.13p (Hedge position: Short position in spread betting with £10.68 bet per point).
| Sector |
Travel & Leisure |
Last closing price
(06/04/2009) (p) |
219 |
| 52 week High/Low (p) |
312/87.75 |
| Market Cap (£mn) |
889.78 |
Sector weight age by
Market Cap (%) |
2.14 |
| Average Volume (k) |
942.5 |
| P/E ratio (TTM) |
17.4 |
Industry P/E
ration (TTM) |
0.73 |
TTM: Trailing Twelve Month
Daily chart (PRTY.L)
Business background and investment rationale
PartyGaming PLC is an online gaming company and it’s main areas of business are internet poker and casinos. The poker business represents 66% of the firm’s total revenues. Trading under two brands, PartyCasino and Starluck Casino, the company offers a variety of casino games – such as blackjack, roulette, keno and video poker – in addition to slot machines. It also operates PartyBingo.com offering a variety of online bingo games.
Resilient performance in poker and casino business
In a final result announced in March 2009, PartyGaming has continued to make good progress this year despite the pressures from a highly competitive market and currency movements. In the four weeks ended 4 March 2009, average gross daily revenue was $1,536,200. In the poker business, new player sign-ups averaged 1,550 per day and there were 51,100 active players per day which generated average gross daily revenue of $738,500. The casino business averaged gross daily revenue of $662,500, while in sports betting, the average gross win per day was $123,000. For the bingo sector it was $12,200.
Launch of new games
In the casino sector, PartyGaming will launch the Rambo, Frank Sinatra, Naked Gun and High Noon slots, as well as over 60 games provided by third-party suppliers such as Cryptologic, WagerWorks and NextGen. By the end of the first half of 2009 the company is planning to have over 130 games and will release more language versions of the casino products to further broaden it’s international appeal.
Expansion in B2B operations
To increase it’s presence in business-to-business operations, PartyGaming has today signed an exclusive agreement to launch an online poker tournament service in Italy. The deal is with INTRALOT which provides PartyGaming with access to the Italian retail network, which includes 600 betting outlets. In 2008 PartyGaming signed an alliance with CIRSA, one of Spain’s largest land-based gaming operator which also has substantial presence in Latin America. The company will seek to exploit online gaming opportunities in Spanish speaking countries, focusing initially on bingo and casino games, to be followed later by a move into poker.
Technical Outlook
On daily chart, PartyGaming has rebounded from it’s high of 265.0p and stock is still above 50 day and 200 day EMA, indicating the long-term uptrend is intact. Stock has also made a higher low and is making a positive slope, which is also an encouraging sign. Momentum oscillator MACD is positive, but 12 day EMA has cross below 26 day EMA indicating weakness in trend. RSI is below 50 indicating weakness in trend. 14 day positive DMI is above 14 day negative DMI supporting uptrend. Stock has resistance at 273.0p and support near 200.0p.
Trading strategy
Stock can be bought near 219.0p with a profit target of 257.0p and stop loss of 208.02p (Hedge position: short position in spread betting with £5.28 bet per point).
Serco Group PLC
On daily chart, Serco was trading between 360.0p and 370.0p last week. MACD is negative and 12 day EMA has crossed above 26 day EMA, indicating a weak uptrend is forming. 14 day RSI is below 50 but making a positive slope indicating a weak uptrend. 14 day negative DMI is above 14 day positive which indicates weakness in trend. Stock has strong support near 320.0p and 350.0p and resistance near 400.0p. Looking at no movement for the whole week in the stock, profit should be booked at 370.0p with a new stop loss of 337.2p.
John Wood Group PLC
John Wood Group hit the reduced profit target of 235.0p and made a high of 249.5p, near to the actual profit target of 250.9p last week. Stock is trading above resistance of 230.0p and is above 20 and 50 day EMA indicating an uptrend. Momentum oscillator MACD is positive but 12 day EMA has cross below 26 day EMA indicating some weakness. RSI is above 50 indicating strength in trend and 14 day positive DMI is above 14 day negative DMI supporting an uptrend. All positions should be closed for the stock.
Cairn Energy PLC
Cairn has broken channel of 1700.0p and 2100.0p hitting profit target of 2230.6p and making high of 2300.0p. Entry for the stock could only be taken at 2070.0p above the recommended price of 2000.0p. MACD is positive and 12 day EMA cross above 26 day EMA indicating an uptrend. 14 day RSI is above 50 showing strength in trend. 14 day positive DMI is above 14 day negative and DMI is near 20 indicating consolidation. Stock is also above 20 day and 50 day EMA which supports strength in trend. All positions should be closed for the stock.
Bellway PLC
Bellway has broken resistance of 700.0p, hitting the profit target of 707.1p and making a high of 800.0p. Entry for the stock could only be taken at 658.5p above the recommended price of 634.0p Stock looks overbought as RSI has rebounded from 70. Momentum oscillator MACD is positive and 12 day EMA cross above 26 day EMA indicating strength in trend. 14 day positive DMI is above 14 day negative DMI supporting an uptrend. All positions should be closed for the stock.
Important Information
This report has been issued by CSS Partners LLP (“CSS Partners”). CSS Partners is an appointed representative of Charles Street Securities Europe LLP (“CSS”) which is authorised and regulated by the Financial Services Authority in the UK. It constitutes non-independent “investment research” as contemplated by the FSA Rules and is thus considered a marketing communication. This report was prepared by Kuldeep Bhati who is employed as an analyst at CSS Partners and as such does not conform with the FSA definition of independent investment research and as such is not subject to the rule of not dealing ahead of distribution of the marketing communication and was not prepared in line with the legal requirements for independent communication.
The report is provided solely for your information and may not be reproduced or redistributed, in whole or in part to any other person without specific consent of CSS Partners.
In the preparation of this report, CSS Partners has had access to publicly available information and other sources believed to be reliable. Whilst reasonable care has been taken to ensure that the facts stated herein are accurate and that the recommendations, forecasts, opinions and expectations contained herein are fair and reasonable, neither the author, nor CSS Partners, nor CSS has verified the public information upon which this is based. None of the author, CSS Partners, CSS or any of their respective directors, officers or employees (the “Parties”) makes any representation or warranty, express or implied as to soundness of the recommendation, the accuracy or completeness of the information or opinions contained herein. Investors must make their own investment decision and not rely on this report. The Parties shall not be liable for any loss, costs, liability, expenses (together “losses”) suffered by you following your utilising any of the services we provide other than losses arising directly as a result of fraud or wilful default on our part or as a result of any liability that may not be excluded under the UK regulatory system. In no event shall we be liable for special, indirect or consequential damages of any kind, even though we may have been informed about the possibility of such loss. You shall indemnify us and our officers and employees on demand and keep all such persons indemnified against all losses which may be incurred directly or indirectly by reason of or in consequence of providing this service save to the extent that such losses arise directly as a result of our, fraud or wilful default.
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Risk Factors
There is no certainty that the recommendations will be successful or that they will make money for investors.
There is no certainty that execution prices can be achieved, either in opening or in closing a position.
There is considerable risk operating in equity, futures, options and spread betting markets and investors need to be able to sustain a total loss of capital along with unlimited liability. Potential investors are recommended to consult a financial adviser before entering into such positions.
Regulatory disclosures
In accordance with the Conduct of Business Rules COBS12.4.7R (i) in the preparation of the report the analyst used price and volume charts provided by independent data suppliers and applied technical analysis tools of investment and trading evaluation in arriving at his recommendations, ii) all recommendations made by the analyst are followed up in subsequent reports until the closure of a position, iii) there is no certainty that any recommendation will be successful or that technical analysis should be used exclusively to arrive at investment decisions.
In accordance with section 12.4 of the FSA’s New Conduct of Business Rules, CSS Partners makes the following disclosures:
CSS, CSS Partners and their respective officers, directors, shareholders and /or partners may have a shareholding in the companies reviewed in this report. They will not have access to this report until it is published, except those responsible for compliance issues concerning this report.
The research analyst responsible for the content of this research report certifies that: the views expressed and attributed to the research analyst or analysis in the research report accurately reflect his personal assessment about the subject securities and issuers and/or other subject matter as a appropriate and no part of his compensation was, is or will be, directly or indirectly related to the specific recommendations or views contained in this research report. On a general basis, the efficacy of recommendations is a factor in the performance appraisals of analysts.
The analyst is not involved in any other activity of CSS Partners or CSS that is inconsistent with his objectivity in preparing the reports. His research information is confidential, the only persons privy to this data bar the analyst are senior management. The research recommendations will be updated, but neither CSS nor CSS Partners accept any responsibility for any delay or interruption of service in the submission of reports or updates to reports.
Distribution of recommendations for the period 1st January to 31st March 2009:
| |
% Distribution of recommendations |
No of recommendation |
| Buy |
100% |
22 |
| Hold |
0 |
0 |
| Sell |
0 |
0 |
The first column displays the % distribution of recommendations made by CSS Partners in this Technical Analysis Trading programme and the second column shows the numbers of such recommendation. Neither CSS nor CSS Partners has any investment banking relationships with any of the companies covered in the Technical Analysis Trading Programme, namely the companies in the FTSE 350 index.
Your attention is also directed to the terms of our client agreement with you that covers the provision of this service. To the extent that there is any conflict between the above and the client agreement, the provisions of the above disclaimer will take priority.
