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ClickSoftware Technologie (CKSW) Message Board

  • fujigrower fujigrower May 9, 2013 9:23 AM Flag

    Intrinsic Acquisition Value and Inflection Points

    Four years ago I took a glance at Market Leader, a real estate software micro cap in the Seattle area. Shares were trading below $2 and the enterprise value was close to zero. LEDR was losing money consistently and struggling to find a profitable business plan. I didn't invest.

    Two years ago the company was still losing money but shares touched $4. Six months ago shares hit $6. Yesterday they announced being acquired for $350 million or $11.30 per share... a P/S ratio of 6. And still losing money. Ouch.

    The Wall Street gang and myself completely missed LEDR's intrinsic acquisition value. We also missed a key inflection point. Over the past two years the number of real estate professionals using LEDR's software jumped from 20,000 to 135,000. They hit an inflection point whose real value had not yet shown up in the financials.

    ClickSoftware, in my opinion, has an intrinsic acquisition value far higher than $7.50 a share. The value of its software, staff expertise, market leading position in schedule optimization and mobility and extensive blue chip customer base are not fully reflected in the financials.

    Click also has the potential to hit a long awaited inflection point in market demand. Long sales cycles and inherently complex implementations limited that potential with schedule optimization software. With the entire business world needing next generation mobility solutions, however, there is inflection potential if ClickMobile emerges as a leading enterprise mobility solution.

    Based on the most aggressive staff expansion in the company's history, Click's leadership team is confident they will achieve at least some measure of inflection in mobility and in the Cloud. One positive indicator is the number of companies and technicians using ClickMobile has surged over the past three years. If that trend continues, at some point it will attract Wall Street's attention... and perhaps an acquisition offer.

    Good luck to everyone.


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    • Fuji,

      I know that you think very highly of Click's management.
      I would like to know why Click does not issue any win PRs during the quarter where their win rate is 40% (according to Moshe on the last earnings CC).

      Obviously, they are winning many deals but not publishing them.
      I think this management time has come and they need new blood that is more comfortable with the street.

      The Gunner

      Sentiment: Buy

    • The Key is 5 X sales. Click can get an acquisition offer at P/S of 5 today.
      Click wants to increase the S number to 120M-140M so the total acquisition price will be at 600M+.

      Fuji, just like you said, LEDR was sold at P/S of 6. The buyer did not care about earnings. They can bring earnings up substantially by streamlining operations. All that matters is SALES !!

      The Gunner

      Sentiment: Buy

    • vo2macs May 9, 2013 10:13 AM Flag

      According to Gartner and the company itself, Click already is the leading enterprise mobility solution. What next? It has to show earnings growth potential. The market has reacted to the severe dropoff in earnings after the company had just established an earnings record. I'll hang on as long as Soros and the other big boys do. When they lose interest, so will I. I'm just frustrated, that's all.

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