Procurement Solutions Providers – How Did Their Share Prices Perform in 2014?

We explained yesterday that as part of our Plus subscription service, every month through 2014 we followed the financial performance of 21 companies who are players in the procurement solution provider world. That ranges from those who are solely involved in our sector (Proactis, SciQuest) to others for whom procurement is just one of a number of areas of interest (IBM, SAP etc).

We put together a weighted portfolio – based on how significant each firm’s exposure to the procurement market really is – to arrive at our “Spend Matters Index”. Then, just to add some spice, my US colleague Jason Busch and I each then chose our own portfolio from these stocks, investing an imaginary $1 million each, to see if we could beat the index. Each month as part of the Plus subscription service, we report on progress of the overall index and of our own portfolios.

So how did 2014 go? Well, overall, the Spend Matters Index showed a somewhat disappointing year for the procurement solution provider market in total. Our overall portfolio of 21 firms has underperformed the wider US stock market, which is interesting in itself, suggesting a bit of growing cynicism maybe around the technology boom and the "cloud" hysteria.

The US stock market is up over 8% on the year form January 1st 2014 and the Dow Jones Global index is up 2.5%,  although the FTSE 100 in the UK  is down 2.6%.  Our portfolio is actually down by some 1.4%.

However, my personal news is better! I’m pleased to say that my selected portfolio – I chose 14 shares out of the 21 to notionally invest in – was up 13.2% over the year. That gave me a convincing win over Jason, who sadly underperformed the Index, losing some 4.5% of his imaginary investment.

Why is that? Really, a small handful of firms and shares have dragged down the wider index. The performance of stocks in blur Group, E2Open and SciQuest have been disappointing to say the least. And the “big boys” – SAP, IBM, Oracle, Cap Gemini et al – have been mixed but not uniformly good enough to pull up our index into positive territory. Whilst there were a couple of stars, Proactis and Basware in particular, and well done to them, that all still added up to the overall Index under-performing the wider market.

Jason had more of his portfolio in a couple of those big losers than me, although we both managed to avoid blurGroup, the biggest losers of all. I also gained relatively by being “invested” in Proactis. Here is the complete list of the firms with their headline performance.

Jan 1st Dec 31st % change
Accenture Plc 81.4 89.31 + 9.7
Access Intelligence plc 3.08 2.8 - 9.1
Basware Oyj 24.5 41.05 +67.6
Blur Group PLC 577.5 64 - 88.9
Bottomline Technologies 35.19 25.28 -28.2
Cap Gemini SA 49.1 59.48 +21.1
Cloudbuy PLC 51.4 25.5 -50.4
Dun & Bradstreet Corp 121.95 120.96 -0.8
E2open Inc 24.16 9.61 -60.2
Elcom International, Inc. 25 31.75 +27.0
Genpact Limited 17.92 18.93 +5.6
Hubwoo SA 0.19 0.17 -10.5
IBM 186.64 160.44 -14.0
Infosys Ltd ADR 57.15 62.92 +10.1
Oracle 37.6 44.97 +19.5
PRGX Global Inc 6.55 5.72 -12.7
Proactis Holdings Plc 36.12 86.95 +140.7
SAP AG (ADR) 84.33 69.95 -17.1
SciQuest, Inc 27.47 14.45 -47.4
Tungsten Corp PLC 247.63 283.7 +14.6
Xchanging Plc 160 155.5 -2.8

 

So what about 2015? We will be doing this again and we’ve added three firms to our list. Selectica, who acquired Iasta in 2014; Rosslyn Analytics, who floated early in 2014, and EU Supply. And Jason and I have selected our portfolios again to renew battle. In addition, our Editor, Nancy Clinton, has stepped up to the challenge too – as an investment novice, she says she has “worked on the dartboard principle” and selected her portfolio totally at random! So it will be interesting to see if she can beat the “experts” (Jason and I). I have a bad feeling about this already ...

And subscribe to the Spend Matters PRO and Plus subscription services to follow the progress of these companies every month.

Voices (2)

  1. Nick @ Market Dojo:

    Love this idea and some very surprising results. Seems blur Group has certainly taken a massive hit. Would it be worth a punt that they might start climbing again? It wouldn’t suprise me if 2015 brings yet more acquisitions and mergers to keep life in this market on its toes.

    Not sure the Oracle result is correct in the above table. Starting at 24.5 in Jan and ending the year at 44.97 would be a lot more than 19.5%?

    1. Peter Smith:

      Nick
      Great spot on our deliberate (transposition error) mistake! thanks. Oracle started year at 37 not 24. Sorry! blurGroup is certainly an interesting one – I am choosing my portfolio for this year tomorrow and it is still I think high risk – but could be high reward. Similar for some others – if Cloudbuy finally deliver on some of their interesting initiatives, the share price could soar – on the other hand, they might crash and burn. Even Tungsten looks expensive on some measures for a firm yet to make a profit – but they could be a huge company in three years time! I guess that’s why we’re not all retired and rich investors, this is tricky!

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