Computershare (CPU)

By Jason Fittler

Computershare Limited (CPU) is the world's largest global share registry.

It is the leading provider of financial market services and technology to the global securities industry operating in 17 countries across 5 continents. Services and solutions are provided to listed companies, investors, employees, exchanges and other financial institutions.

Despite previous 2011 guidance for a 5-10% decline in earnings per share, we were expecting a quicker turnaround due to the tentative recovery in global equity markets.

Previous guidance for 2011 is reaffirmed subject to equity; interest rate and FX market conditions remaining broadly in line with current levels.

Importantly, the dividend in A$ was held, we retain our A$0.28 per share dividend forecast for 2011.

Despite the weaker full year outlook, the first half 2011 operating performance was solid, with management doing well to deliver operational improvements. However, earnings remain leveraged to capital market activity and business confidence, and CPU obviously has no control over equity, interest rate and foreign exchange markets.

Comparisons with pervious corresponding period are misleading due to the stellar performance achieved across key businesses within the group in 2010.

With the current weakness in the share price and a valuation of $10.90 buying the stock around the $9.70 level makes good sense.

This is a long-term stock which if you are comfortable that the stock markets around the world will continue to improve then so to will computershare profits.

Yield is a little on the low side but this should be offset with growth over the next 3-5 years.

For more information on Computershare (CPU) please contact us on 07 4771 4577.