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TIBX – Sold…

I never consider myself to be an investor who might be in a rush to sell a holding I only initiated a position in as early as late last month, but considering the situation, recent news and valuation of the company on its intrinsic fundamentals – I felt it was prudent to take an attractive short-term gain and re-evaluate the company if or when the stock comes off in price.

The surge in TIBX today (~13%) was based mostly on news of Oracle’s $6.66B offer to purchase BEA Systems as technology companies such as Oracle, German SAP & Microsoft attempt to consolidate business information/software services into their own operations. This would leave TIBX as one of the last remaining companies along with Canadian firm Cognos in this space and speculation has been that they may eventually fall prey to their larger competitors over time.

Tibco Software was a recent Value Favourite that I wrote a short post about back in September after I stumbled upon the company through a viewer of this blog. I felt it offered significant value on a forward-looking basis, but I had trouble today justifying its valuation above a P/E of 35. Although I will more than likely watch the stock closely in an attempt to get back into a position, at this time the stock has not only hit my price target for a sell but is likely to come off this lofty price as speculation decreases. My continued analysis suggests that future earnings growth will accelerate over the next 12-18 months as Spotfire is implemented into the operations of the company and subsribership increases with the abundance of products the company currently offers. Their client base also offers value through their long-term relationships that help to accurately predict future revenues.

*** I also liquidated my full position in Potash Corp today as the stock has appreciated past my sell price and I look for opportunities of more significant value elsewhere.

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