Updates and Ideas

Touchstone - Profit up 125%

September 2006

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Computer Software Group (CSW; 103p) has been a successful recommendation for us as it continues the process of consolidating the smaller suppliers of legacy software systems for the IBM iSeries. When it has come to consolidation in the space, only CSW has been a success. This has proved a reflection of at least two related factors; the ability of its chief executive, Vin Murria, to close those transactions so rapidly (fifteen deals in 18 months versus two or three for the competition) and the fact that the businesses being acquired are cash generative, making the finance-side of things relatively easy. The rapid ascent of CSW might be irritating to the also-rans in the sector including Sanderson, Maxima and K3 but we’re sure they ...

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SMC

Mid-States - Does deal after almost five years

With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

Touchstone - Profit up 125%

September 2006

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