You are here: Home - Investing - Experienced Investor - News -

Stock of the week: Micro-Focus International

0
Written by: YourMoney.com
17/07/2017
Helal Miah, investment research analyst at The Share Centre, picks IT software producer Micro-Focus International as stock of the week.

Micro Focus International produces software products that help its customers, mostly large companies, to improve the efficiency of their IT systems and integrate new software applications with older ones.

It’s an exciting time for the group given the eagerly awaited acquisition of Hewlett Packard software assets (HPE) – one of Britain’s biggest ever technology deals. In an update last week, Micro Focus confirmed that the takeover is due to complete on 1 September this year and will return $500m to shareholders. There is significant potential for growth in earnings as a result of the merger. Moreover, the scale of the deal reduces the risk level for investors and should boost dividends in due course.

Interested investors may want to note that other recent acquisitions, such as Attachmate, have given Micro Focus access to more markets around the world, which could significantly boost earnings and will provide a large stream of recurring revenues. In addition, the increasing presence of high-profile hacking incidents, such as the global Wannacry ransomware attack, may increase demand for the type of cybersecurity software products provided by the company.

In regards to the numbers reported of late, the group stated recently that despite a 0.9% fall in revenue to $1.38bn – which investors should note was within the range of previous guidance – adjusted earnings rose 20% to $640.9m. Cash generation improved during the year and net debt was down, which helped the company to lift dividends by an impressive 32% for the year.

Due to the potential boost from HPE, and other recent acquisitions, along with the healthy dividends and the group’s exposure to a wide geographic spread of regions, we continue to recommend Micro Focus International as a ‘buy’ for medium risk investors with a balanced portfolio.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • 'Over the last year, the amount of money saved in Innovative Finance ISAs – or IFISAs – has increased by over 700%'- https://t.co/dPjhoorgPp
  • Sainsbury’s and Asda promise £1bn of lower prices if merger goes ahead - https://t.co/pf3D3sPOXb
  • Are you planning to make a last-minute investment into your ISA or SIPP during this tax year? Here are five tips to… https://t.co/lGjHix7F7y

Read previous post:
Are you a comper? Make sure you don’t give too much away

People entering competitions risk being scammed, with many sharing their personal details before checking the offer is legitimate.

Close