American Software, Inc. (NASDAQ:AMSWA)

You have to be worried about a dividend cut here; the balance sheet numbers are nice and relatively safe, but earnings and cash flow are nothing to go crazy about, even on an enterprise basis. It's not a bad pick but I think there are better places to go right now.

Market Cap of $150M, $50M in cash vs no debt, forward P/E is 16. 6.5% dividend yield, but the payout ratio of 327% is unsustainable.

Excellent.

AMSWA is VASTLY undervalued. Especially below the 7 mark.

With it's consistently increasing, historied, and already large quarterly dividends matched with DRIP, and its ownership of LGTY, regardless of the companies earnings this stock is a winner.

If you buy 100 shares today and enroll in DRIP, and if the dividend and stock price stay the same, you would double the number of shares owned in 13.5 years.

that is without any growth whatsoever, which it is positioned to grow. With no debt, they can afford expansion while keeping the rising dividends active.

must go up

tech with a dividend

Curious to see if this one still has the legs to make another run for it. Pretty much at the 52-Week Low, no debt... seems like it could move.

AMSWA pays a nice annual dividend, but other than that the stock is basically useless.

I like software stocks. This one owns most of LGTY, has no debt, and has a nice dividend.

Large amount of cash on-hand plus the reliability of a proven global distribution chain. The line of software product is applicable throughout the world-wide sales force.

AMSWA is absurdly cheap. Between their cash hoard and ownership of LGTY, you are basically getting their organic growth and dividend for free...

www.smartguystocks.com

American Software has probably the sweetest dividend in the software space and that was the immediate attraction here. Upon further review, the company is growing at a steady 12-15% per annum with a forward price to earnings of just 17. I really love software companies with no debt, and AMSWA maintains $3 in cash per share. So basically you're getting a 4% dividend on a $5 stock after cash. Their earnings history can be a tad erratic with analysts having a hard time getting a good bead on their business fluctuations, but the risk/reward here seems reasonable.

Nero

Sagetrade

This is a solid company although a small player in a field with a lot of competition. They have a couple of things that made me sit up and take notice, two of their biggest draws to me is a healthy dividend and zero debt.

They seem pretty well diversified and have been in business since 1970. Management seems to be level headed.

A software company that has developed a very powerful tool for POS (Point Of Sales) that is extreamly easy to use and incorporate into a retail type business.

Consistent growth, strong dividend, recent price retreat.

Recovery due.

Has taken a beating lately(not sure why it has been so bad)but I expect it to double in the next 2-3 years. I own a few hundred shares so I do have a vested interest.

increasing stake in subsidiary

http://shadunskymethod.blogspot.com/2007/10/american-software-fairly-valued-amswa.html

So there has been a lot of talk regarding American Software on the Yahoo Message boards and in the MF Caps, everyone seems to think its undervalued and a great "Asset play." From further analysis, it is far from it. Here is the math:

AMSWA owns 88% of LGTY = $165.8 mln

Cash on the books is $75.6 mln, but $30 mln is from LGTY so net of $45.6 mln

So that gives a value of $211.4 mln for AMSWA so far.

The last portion of the calculation would be AMSWA the company, separate from LGTY. The last three years for AMSWA performance has been dismal separate from LGTY, their Net Income has roughly been $3.16 mln, -$2.03 mln, and $3.82 mln. They have roughly 26.8 mln shares outstanding which leads to roughly $0.06 per share on average over the past three years. Maybe a P/E of 10 in the best case scenario gives a valuation of $0.60 for AMSWA solo.

So, $7.89 valuation of cash on the books plus LGTY stake. Plus a valuation of $0.60 for the co itself suggests roughly a $8.50 valuation for each AMSWA share. With a P/E of 20 that yields roughly a $9.10. Regardless of how an investor values AMSWA by itself, the stock is fairly valued. The only reason AMSWA stock has been moving has been because of LGTY.