In its ‘Morning Bulletin’, Arbuthnot Securities focused on marketing software developer smartFOCUS (LON:STF) in light of new M&A activity surrounding its peers. The stockbroker believes the AIM-listed company has the opportunity to benefit from the continuing consolidation in the software sector.
Specifically, Arbuthnot referenced IBM’s (NYSE:IBM) US$480m bid for Unica Corporation (NASDAQ: UNCA) – an enterprise marketing management specialist - on Friday.
“IBM is paying over 4x the forecast revenues for FY2010. smartFOCUS, therefore, looks compelling value, in our view, on a 0.6x EV/sales multiple for the corresponding period,” Arbuthnot said.
Furthermore, Arbuthnot was particularly bullish on the stock, stating that its valuation for smartFOCUS “could prove highly conservative”.
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