Mike Arnold
Long only, small-cap, tech, growth at reasonable price

NCR Corp.: Hardware Enabled, Software Driven

In what feels like an overheated market ripe for a pull back, shares of NCR (NYSE:NCR) are looking like a solid value given its transformation to a hardware enabled, SaaS driven revenue model. After a selloff from the low $40's in October 2013, the shares have yet to re-rate higher.

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NCR data by YCharts

Investors are rewarding software businesses -- especially of the SaaS variety -- with rich valuations and sales multiples generally in the 5x to 10x range. NCR, however, remains predominately known for hardware (ATM's and the like); meanwhile NCR has quietly improved its operating model and expanded its software solutions with targeted acquisitions, including the recent Digital Insights acquisition. Software now makes...

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