a lot of new information is emerging these days. Companies are increasingly able to provide more clarity about their situation and the likely path forward. A pleasant outlier among them is SNP (ISIN DE0007203705), the German software company. According to its management, the impact of the coronavirus on SNP's business has been negligible. SNP is in the lucky position to allow most of its employees to work from home. I do believe, however, that there are short-term risks. Major corporations are currently busy securing liquidity and manoeuvring through the numerous challenges thrown up by the crisis. I would expect that some clients will push their software transformation further into the future, which could yet hit SNP's 2020 figures. Then again, everyone is aware that there will likely be an acute shortage of software consultants in years to come. Waiting could make the migration to the new SAP system even more costly and create new risks. It's safe to assume that transformations which are pushed out into the future will probably be added to SNP's future fiscal years. That's a comfortable position to be in given the world's overall circumstances. SNP just closed another significant strategic partnership, a three-year deal with Spanish IT company Common Management Solutions SL (Common MS). Just as was the case with previous strategic partnerships (Google, Microsoft), SNP is gaining accessto a significant market, and the contract likely involved a minimum revenue commitment. The deal's announcement gave SNP stock a boost to EUR 50. During the panicky part of the crash, it had tumbled from EUR 74 to EUR 33. Bar major market turbulences, I doubt it'll test its recent lows again. The most up-to-date earnings estimates are EUR 2.15 per share for 2021, and EUR 2.92 for 2022. For a fast-growing software company, SNP is anything but expensive. Following the extreme volatility of the past few weeks, SNP shareholders can probably simply sit back again and wait for this gem of a company to pursue its plans for the next few years |