CKCM 1-yr chart:
When it comes to software, I can't stress enough the value of having experienced management. In the highly niche, sophisticated and competitive software market experienced management is the difference between a deal maker or breaker. Product life cycles are very short in the software industry, so if you're buying a software company, you're buying into the people running it.
Here a list of software companies that fit the bill:
Bottomline Tech. (NASDAQ:EPAY) - Electronic banking is a growing market, and EPAY has demonstrated they can be profitable in this space. The CEO has been with the company since 1996 & the COO since 1998.
Covansys (OTC:CVNS) - Profitable software smallcap with a CEO who has stuck with it since 1985.
Moldflow Corp. (MFLO) - Makes computer aided engineering software. I think this company would better complement Illinois Tool Works core businesses than CKCM, but then again, I thought someone like Oracle (NYSE:ORCL) would have bought CKCM. CEO has been with the company since 1997.
Pegasystems (NASDAQ:PEGA) - Probably the highest risk stock of the four, but also has the most committed CEO who has been with the company since 1983. With a market cap of 286mm, but an enterprise value of only 159mm, it could easily be taken over by one of its many impressive partners.