3/14/2010

Versant Corporation: VSNT

VSTNT is a profitable software developer creating object-oriented database management system products to solve complex data management and data integration problems of enterprises.

The reason for adding a small position to my diversified portfolio are many including the following;

Massive accretive EPS share buy backs: Expended $2,700,000 in share buy backs during 2009.

High quality earnings yield: FCF/EV = 19.21%

Consistent high ROIC: ROIC 2006, 2007, 2008 = 27.41%, 34.38%,32.28%

Quality capable management in U.S. and Germany, R&D in Germany and India,

Strong balance sheet: Price/EV = $14.80/$8.33= 174%

Value institutions holding and adding shares

Mean reversion candidate with negative one and three year share price returns: 1Year Return = -4.60%, 3 Year Return = -6.20%, 3 month return = -16.20%

Discounted P/S and P/B valuation versus the historical measures (see link)

Virtually no shares sold short

Risk: Revenues declined 20% for the current year over year quarterly results

Please click to review the above along with current and historical decision making financial data

1 comment:

slinj said...

John, this is a good pick. Good ROIC, high margin, high customer retention. It would be nice to see some traction on the license revenue, potentially a buyout target. Thanks for the idea.