British software company Sage was a thorn in Nick Train’s side for much of this year as its share price dropped 24.4% from its high in March to the end of October.
Yet the £13bn company came roaring back in November after its share price soared 35% throughout the month.
The 2024 results it released in November revealed a 9% increase in revenue throughout the financial year to £2.2bn, which markets responded to positively.
Before then, Sage’s poor performance had dragged Train’s Finsbury Growth and Income Trust down this year, with the £1.4bn portfolio falling 0.2% in 2024 up until October – significantly lower than the 7.7% return made by his peers in the IT UK Equity Income sector.
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But the positive financial statement from Sage – Train’s second largest holding, worth 12.9% of all assets – bolstered the trust in November. It has now delivered shareholders a total return of 6.5% since the start of the year.
Sage’s shares have slumped 1.7% in December, but still sit near an all-time high. Despite this considerable re-rating, Train anticipates further growth ahead as global investors realise its full potential.
“It looks expensive by the standards of the UK stock market. However, as the company is keen to point out, it is not so expensive when compared to growing software companies listed on other stock markets,” he said.
“Sage wishes and deserves to be valued compared to a global cohort of companies, and global or US investors are as likely to determine its valuation as UK institutions.”
