I am starting a 1.8% position in a new name to the website: Tibco Software (TIBX), as we have a nice combination of fundamental and technical promise in this company.
Technically, the stock broke to new yearly highs today and (barring a market setback) this is exactly the type of "breakout" one is looking for. The only fly in the ointment is a lack of volume expansion but that has not mattered in the new paradigm market of the past 15 months. (Click to enlarge)
Fundamentally, the company is in decent sector ("business intelligence") -- not a super fast grower but solid -- reported decent enough earnings in late March, and has replaced an existing stock buyback program with a new $300M program. With a market cap of $2B this is a material buyback and, unlike most companies that announce buybacks to stroke the market but often do not follow through, Tibco has a history of actually completing its purchases. No time frame was announced for the purchases, however.
- TIBCO Software Inc. today announced that its Board of Directors has authorized a new share repurchase program pursuant to which the company may repurchase up to $300 million of its outstanding common stock. This program replaces the company's previous $300 million stock repurchase program, under which approximately $27 million was still remaining. The program does not obligate TIBCO to acquire any particular amount of common stock, and it may be modified or suspended at any time at TIBCO's discretion.
The company's last earnings report was decent, with EPS of 12 cents vs. analysts at 10, and a moderate beat on the top line. (up 17% year over year). Cash flow $40.5M, repurchased 3.5m shares. Analysts upped 2010 estimates from 62 cents to 65 after the report.
With tech companies cash rich, this is the type of company always circling the water cooler as a potential take-out candidate so there is always that potential icing on the cake.
Overall, this is a solid if not inspiring company, whose technical profile looks appealing after today's stock move. Except for the crazy action late last week, the stock has had fantastic relative strength, not falling below the 20-day moving average since February.
Disclosure: Long Tibco Software in fund; no personal position