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Why SS&C Technologies Stock Jumped 10.6% in September

By Steve Symington - Oct 7, 2019 at 8:03PM

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Thanks to a prediction for increased M&A activity and a pair of intriguing acquisitions, the investment software specialist partially bounced back last month.

What happened

Shares of SS&C Technologies (SSNC 0.11%) climbed 10.6% in September, according to data from S&P Global Market Intelligence, rebounding from a steep drop between late July and early August after the investment technology software company predicted a rise in broader M&A activity and announced a number of its own strategic acquisitions.

So what

For perspective, SS&C stock plunged nearly 30% from July 29 to Aug. 5 after the company posted reasonably strong second-quarter 2019 results but still lowered its full-year outlook despite it. At the time, management blamed its tepid guidance on a combination of lower trading volumes affecting revenue at its Eze Software subsidiary, a slower environment for mergers and acquisitions hurting Intralinks revenue, and attrition at some recently acquired businesses.

Chess pieces lined up, with one half black, half white pawn in the center.

Image Source: Getty Images.

Shares began to gradually rebound in late August, however, and continued to rise through early September after the company issued its latest "Intralinks Deal Flow Predictor," including a forecast for a notable increase in M&A activity for the second half of 2019.

On Sept. 12, SS&C then announced it had agreed to acquire investment and portfolio-management platform Investrack from United Arab Emirates-based Globacom Technologies. Then, on Sept. 25, SS&C followed this up by announcing a separate agreement to acquire certain "Algorithmics" risk analytics products and services from IBM.

Now what

Of course, it remains to be seen how much these acquisitions will contribute to SS&C's top and bottom lines in the near future, so I'm content continuing to put my money to work in other top stocks while I watch from the sidelines for more tangible signs of sustained improvement. But after SS&C coupled its prediction for a resurgence in M&A (which is beneficial to Intralinks) with the latest extensions of its growth-by-acquisition strategy, it was hardly surprising to see the company's shares partially recoup their summer losses last month.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool is short shares of IBM and has the following options: short January 2020 $200 puts on IBM, short January 2020 $155 calls on IBM, and long January 2020 $200 calls on IBM. The Motley Fool recommends SS&C Technologies Holdings. The Motley Fool has a disclosure policy.

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