Stock market analysis
SAP’s stock between exciting and unsexy — What kind of return to expect?
SAP has been a part of my portfolio for a long time. I recently wrote on its acquisition of Signavio, a move I find very inspired! SAP was one of the first shares I ever bought. Understanding a huge company like SAP is a challenge. The annual report alone is some 270 pages long. So you can dig for weeks on end if you so desire. That is not what I do here because a) I just don’t have the time for that and b) I don’t think investment decisions should take weeks of research. My methodology is following what I outlined in my article here. So without further ado, let’s dig in. [Before, if you are the kind of person who needs a disclaimer, there is one at the end of this piece.]
Business model
The larger the company, the more diversified its products and activities tend to be and the harder it is to wrap your head around what exactly they are doing. SAP is a German technology company, focused mainly on enterprise software that revolves around resource planning, aka. ERP systems. They are in the midst of moving from on premise software to cloud software and intend to migrate their customers to their new product suite and database technology, S/4Hana. Besides their ERP system, SAP has a large portfolio of software solutions, including…
