Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Sage 'sell' warning dents Terry Smith and Nick Train

4 Comments
Sage 'sell' warning dents Terry Smith and Nick Train
 

The FTSE 100 has recovered some ground from last week's sell-off amid optimism over trade talks between the US and China, but shares in Sage (SGE) fell to the bottom of the index after a downgrade from analysts at Deutsche Bank.

The accountancy software provider, a top holding for Citywire AAA-rated Terry Smith and AA-rated Nick Train, fell 5.5% to 629.4p as analyst Steve Goulden labelled the stock a 'sell' and cut his price target.

'Over the last few weeks, we have spoken to a number of accountants and resellers across the UK, US and Australia, along with senior figures from key competitors Xero and Intuit (INTU.O),' he said.

'Our key takeaway from these conversations is that the competitive situation in Sage's core mid-market franchise appears to be worsening. 

'Entry level players at far lower price points are moving upmarket and are building functionality either internally or through third party platform partners. Higher end competitors also appear to be gradually gaining share from Sage's core user and reseller base.'

Sage is a major holding for Smith in his £16.2 billion Fundsmith  Equity fund, although the stock no longer makes it into his top 10.

The shares meanwhile account for 5.1% of Train's £5.6 billion Lindsell Train UK Equity fund and 4.9% of his Finsbury Growth & Income (FGT) investment trust.

The shares are down 21% since the turn of the year as subscription growth has slowed.

Train acknowledged in an update to investors last month that the company faced challenges 'in migrating its business to the cloud, in the face of new competition from exponents of the new cloud technology'.

At the other end of the index, miners recovered ground from last week's heavy sell-off as copper prices rose on hopes of progress in trade talks between the US and China later this month. Risers included:

  • BHP Billiton (BLT) +2.8% at £16.75;
  • Anglo American (AAL) +2.2% at £15.68;
  • Glencore (GLEN) +2.2% at 311.6p;
  • Antofagasta (ANTO) +1.9% at 843p.

On the Alternative Investment Market, shares in Mulberry (MUL) slumped 14.9% to 484p as the luxury bag maker warned of a £3 million hit from the collapse of department store House of Fraser.

Mulberry operates 21 concessions across the group, which was bought out of administration by Sports Direct (SPD) this month.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Nick Train
Nick Train
4/477 in Equity - Global (Performance over 3 years) Average Total Return: 81.39%
Terry Smith
Terry Smith
17/477 in Equity - Global (Performance over 3 years) Average Total Return: 67.84%
Citywire TV
Play Hugh Young: the buck stops with me on Asia recovery

Hugh Young: the buck stops with me on Asia recovery

The Veteran Asia Pacific fund manager discusses how he is going to improve the performance of Aberdeen Standard Asia Focus and the other investment trusts run by his team.

Play Tim Steer: fund managers will have to get 'stuck in'

Tim Steer: fund managers will have to get 'stuck in'

The second part of our film with former Artemis and New Star fund manager Tim Steer looks at how his profession has evolved over the past two decades.

2 Comments Play Tim Steer: how to spot a stock disaster coming

Tim Steer: how to spot a stock disaster coming

The former Citywire AAA-rated fund manager has written a book on 22 stock disasters and how forensic examination of annual reports could have spotted them coming.

Read More
Your Business: Cover Star Club

Profile: how a private office combined Lord North Street and C Hoare veterans

Profile: how a private office combined Lord North Street and C Hoare veterans

Quite different roads took Koerling and McArdle to Owl, but this diversity of background and experience is designed to be at the very heart of the business.

Wealth Manager on Twitter