LawsonGuru Blog

Thought-Provoking Commentary for the Lawson Software Community

LWSN: It’s Time (to Reinvest)


Yesterday, Lawson released their fourth-quarter and fiscal year 2008.  To just read Lawson’s press release (http://www.lawson.com/wcw.nsf/pub/new_3CABF3), you can see that (according to Lawson, at least) everything’s rosy:

“Company posts more than $100 million increase in annual revenues”.

But, you then comes the Wall Street spin, which is, frankly, amusing:

image

I’ve highlighted some of these, just to give you a flavor for how the results are interpreted. 

Now, I’m not a financial analyst, but here’s my take:

  • Revenue is up (that’s good)
  • Profit, while not a loss, is not as high–percentage-wise–as it used to be (that’s still good)
  • Lawson is going to buy back $200MM of their own stock (that’s good)

That’s it, folks. 

Remember: Wall Street loves volatility.  They make their money on the shorts/longs, and really don’t care about the long-term viability of the company.  One of the things Harry Debes said when he came on-board was that he would not manage the company to please, nor in reaction to, Wall Street.

I agree with Lawson’s decision to the stock buyback.  I never really understood stock repurchase plans until someone explained it to me like this:

“When times are bad and you can’t make a decent return on any investment, the best investment is yourself.  If you can’t re-invest in yourself (by buying back your own stock), what are you telling the rest of the world?”

So, the bottom-line is: revenue is up, still profitable, and re-investing.  Sounds like a solid plan to me.

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2 responses to “LWSN: It’s Time (to Reinvest)

  1. Bill Ianni July 12, 2008 at 10:26 am

    Sometimes a good signal to where the pros think a stock is heading can be found in the options market for a stock. For LWSN, the ratio of puts to calls is nearly 8 to 1 for August 2008 $7.50, and 9 to 1 for November 2008. This would seem to indicate that pros are long on LWSN.

  2. MTFF August 1, 2008 at 7:05 am

    When ever I consider buying a stock, I ask myself, does the company sell product / service I love?

    Example would be, I love the iPod, then I would buy Apple stock. I don’t like Windows Vista, I would not buy Microsoft stock.

    If I had my choice, I wouldn’t have purchased Lawson…. for two reasons.

    1. Some of us pay money to investment brokers that does detailed research on companies, then make recommendations to their clients to buy or sell stock. I have first hand experience dealing w/ Lawson. The quality of their product, the attitude of their employees. I don’t have a positive opinion of either.

    2. There really is nothing “unique” about Lawson. There is nothing they have, other vendor’s don’t offer.

    No, its not time to re-invest in Lawson.

    With all that said, I do make my living from supporting Lawson (until my other job takes off), so, …

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