The Finextra50 Financial Technology Index fell 1.54% last week as investors' concerns that defaults on US subprime mortgages could spread to various other kinds of debt affected stock markets worldwide. Bank stocks and companies viewed as exposed to the sector were particularly hard hit. However, several US companies in the index posted strong gains, including Jack Henry and Online Resources.
Major gainers
Jack Henry was the week's biggest gainer, rising 8.46% to finish at $25.63, reversing the falls of the last two weeks of July and moving closer to the 52-week high level of $27 it was trading at in early July.
The company's fourth quarter and fiscal year-end 2007 earnings will be announced after market close on August 21.
Online Resources rose 8.29% to finish the week strongly at $12.93. The company's shares have been buoyed by Fiserv's pending acquisition of competitor CheckFree, which values CheckFree at roughly 4.4 times sales and about 35 times trailing earnings. At last week's closing, Online Resources was trading at 3.6 times last financial year's sales of $91.7 million.
Last week the company announced that it had completed its purchase of billing services provider Integrated Transaction Solutions Inc., which it bought for $45 million in stock and cash. Online Resources also reported that the US regional bank BOK Financial had extended a multi-year contract for online payment services.
The company will announce Q2 earnings this week, after delaying last week's announcement due to an evaluation of the accounting treatment related to an embedded derivative in its preferred stock.
Broadridge Financial Solutions ended the week up 7.51% to close at $18.33. It appears to be on the rebound after hitting the bottom of late July's slide on 3 August.
During the week it announced a special one-time bonus arrangement for the company's CEO Richard J. Daly, which stipulates a bonus payout of $500,000, dependent upon reaching undisclosed performance targets based on net operating income for the final half of this calendar year.
The company also announced a new client deal last week, with Mizuho Securities USA signing a multi-year contract for Broadridge's mortgage-backed trade processing service bureau.
Advent Software ended the week up 6.19% to close at $40.98, after rising as high as $47.11 on Thursday amid heavy trading. This is a level the stock hasn't seen since the first half of 2002. The upsurge began on July 26 when the company reported 15 new customer signings and 18% revenue growth for the second quarter.
Vasco Data Security also continued its winning streak driven by last month's strong profit announcement, which saw it double profits year on year. It closed the week up a further 5.28% to finish at $30.28. Vasco is the strongest performing stock since the Finextra50 index was benchmarked on 4 May 2007, posting a 41.5% increase in that time.
Major losers
While all the stocks with significant gains last week were US companies, the fallers were a mixed bag. At the high market capitalisation end of the index, falls in Reuters (2.99% to 600p) and Computershare (4.14% to AUD$8.80) weighed heavily on the index.
Among other companies to fall amid volatile trading across Europe last week - particularly on Friday - were German insurance software vendor FJH AG (down 11.76% to EUR2.40); The Innovation Group (down -9.49% to 31p); and Linedata Services (down 6.19% to EUR15.90).
UK derivatives trading systems vendor Patsystems ended the week down 6.84% at 26.55p, despite beating analyst expectations with a 57% rise in pre-tax profits for the six months to 30 June.
In the US, S1 posted more moderate growth, with revenues up just 11% to $100.2 million from $90.2 million in 2006 for the six months to 30 June. Its shares closed down 7.24% at $6.53.
Index comparison
Methodology
More information on the Finextra50 Financial Technology Index methodology and constituent stocks can be found here.