Strong performance in the US markets last week, which saw the Dow Jones Industrial Average and S&P 500 hit record highs driven by optimism about the state of the US economy, helped the Finextra50 to climb above 100 for the first time. Vasco Data Security, Fiserv and Fidelity NIS saw the biggest increases.
Authentication technology vendor Vasco Data Security closed last week up 9.5% on the previous week at $23.17. Its share price has almost tripled in the past year. The company is on a bit of a PR push at the moment, benefiting from media interest in online security issues, as well as strong demand for its products in the market. Vasco was portrayed positively in a BusinessWeek Hot Growth Companies feature published during the week, and Chairman and CEO T. Kendall Hunt appeared on a Bloomberg TV interview on Thursday. Amit Dayal, an analyst with Rodman & Renshaw in New York, says he expects the company's net income to climb 20% this year, to $24 million, on a 58% jump in sales, to $120 million.
Fiserv ended the week up 8.73% at $58.88 as the market took a positive view of its current restructuring initiatives and the previous week’s news that it will offload its Investment Support Services business in two separate transactions – the larger one being a sale to TD Ameritrade.
In a client note published during the week, an analyst at Cowen & Co. upgraded its rating on the company from neutral to outperform, citing the possible sale of other segments of its business, and a sales force realignment that could boost organic revenue growth.
Fidelity National Information Services (FIS) closed up 7% at $53.91. Its former parent company Fidelity National Financial, to which it still maintains strong ties, is involved in a deal to take processing firm Ceridian into private equity ownership. Ceridien’s main business is payroll and HR processing, but it also owns Comdata, a pre-paid card provider and merchant processor. Reports came out last week speculating about further transactions and reorganisations that might occur between these related companies. One story on Digital Transactions speculated about Comdata being combined with FIS’ Certegy card processing business.
Transaction Systems Architects (TSA), which trades internationally as ACI Worldwide, also ended the week up, closing at $34.53, an increase of 6.3% on the previous week.
At the large-cap end of our index, Reuters, Cognizant and DST Systems all ended last week with modest gains. Reuters share price recovered after the previous week’s drop to head back toward its the 5-year high level of 639p it recorded two weeks ago, ending the week up 2.8% to 637.75p. During the week it was reported that activist investor The Children's Investment Fund (TCI) has built up a 1.36% stake in Reuters. The fund, which was the most vocal critic of ABN Amro leading up to the current bidding war for the bank, bought 3.4 million contracts for difference (CFD) in Reuters on Thursday at 629 pence, taking its total stake in the company to 17.07 million shares. The CFDs don’t confer voting rights.
Meanwhile, Cognizant halted the downward trend in its share price throughout May to close up 3% to $75.71.
The largest gains outside the US were Oberthur Card Systems and GL Trade, which rose 4.2% and 3.7% respectively on Euronext Paris.
It was a good week for the majority of our index’s constituent stocks, and only one company saw its share price fall more than 2%, that being AIM-listed trading system vendor Patsystems, which fell 4.7% to 28.3p.