Computershare Shares Jump up 3.58% After Business Briefing Session

What happened to the Computershare share price?

Shares of Computershare Limited [ASX:CPU] gained over 3.58% today.

Why did CPU shares jump up?

During its annual business briefing session, Computershare said it is optimistic that margin income will increase in FY18. It aims to drive margin growth by developing new income streams, cross-selling services, and increasing operational efficiency with automation and centralisation of back office and shared services.

Shares have climbed from $14.25 to $14.74 at time of writing.

Founded in 1978, Computershare is one of the largest registry providers in the world. The company has expanded globally by acquiring other companies. It provides investor services for some 30,000 corporations and more than 100 million of its shareholders. It has 20 offices across Asia, Australia, North America, Europe and Africa. Yet its operations in the US account for nearly 40% of sales.

Computershare is also the largest third-party mortgage servicer in the UK, with over 60% market share.

What now for Computershare Ltd?

Computershare has struggled to grow revenues and profits over several years, as companies have been bringing service in house. In 2015, revenue declined 2% and net income fell 39%.

Investors need to decide if the company’s track record in innovation, efficiency and cost reduction will be enough to increase margins in the future.

By Selva Freigedo

Selva Freigedo is an analyst with a background in financial economics. Born and raised in Argentina, she has also lived in Brazil, the US and Spain. She has seen economic troubles firsthand, from economic booms to collapses and the ravaging effects of hyperinflation, high unemployment, deposit freezes and debt default. Selva now writes from her vantage point here in Australia. She is lead Editor at the daily e-letter Markets & Money. And every week, she goes through each report and research note produced by our global network of trusted advisors to find the best investment opportunities for you in Australia and overseas. She packages these opportunities for you in Global Investor.

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