3. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
Number of Hedge Fund Holders: 50
PE Ratio: 19.63
Share Price as of December 26: $51.31
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) provides software products and software-enabled services to financial services and healthcare industries. On December 5, SS&C Technologies Holdings revealed that it has acquired Complete Financial Ops Fund Services, a Colorado-based fund administration firm that targets private equity funds and family offices, in an all-cash deal. On November 16, SS&C shared a quarterly dividend of $0.20, in line with the previous, with a forward yield of 1.53%. At the end of the third quarter, Seth Klarman’s Baupost Group owned 3.8 million shares worth $180 million in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC).
On December 6, Truist analyst Terry Tillman maintained a Hold rating on SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) stock and lowered the price target to $55 from $75, noting that software and tech-enabled service stock valuations have remained weak.
At the end of the third quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2 billion in SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), compared to 50 in the preceding quarter worth $2.7 billion.
In its Q3 2022 investor letter, LVS Advisory, an asset management firm, highlighted a few stocks and SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) was one of them. Here is what the fund said:
“SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is a publicly traded acquisition platform led by its founder Bill Stone who is also the largest shareholder. SS&C’s platform focuses on investment fund services (accounting, administration, back-office tools) and enterprise software. The company routinely makes large acquisitions in its target markets financed by debt and then quickly rationalizes the acquired companies and pays down debt. SS&C and its operators are very good at what they do. Since becoming public in 2010, SSNC has compounded its earnings per share at 25% per year (over 11 years). Despite this impeccable track record, the stock is down more than 40% this year. Investors are generally skeptical that an acquisition platform can generate strong investment returns given the current level of interest rates. Investors are also worried that SS&C’s customer base will be negatively impacted by the decline in asset prices. I am happy to take the other side of that bet! While SS&C will face some near-term headwinds from the market’s volatility, its client base is largely composed of private equity funds and hedge funds which have fared relatively well during 2022. SS&C’s valuation multiple is the cheapest it has ever been since its IPO and the company is aggressively buying back stock. A well-timed transaction could also be in the cards. SS&C made several outstanding, opportunistic acquisitions during the great recession from 2008 to 2010 and the company is primed to run that playbook again.”
