The share price of Altium (ASX: ALU) soared past our position entry price of $2.87 back in late January over the coming months. We were then surprised (and delighted), to see the share price fly north of $5 in such a short time.
Source: Yahoo Finance
Recently, the share price has pulled back to the mid $4 range and some may wonder if our view has changed since January. Whilst both funds lightened their positions around $5, overall our view on the long term prospects of the company still holds. We believe that the shares are trading at approximately fair value at the current price.
More detailed information has come out regarding their historic subscriber numbers which demonstrate a pleasing trend. For financial year 2015 we expect the subscriber base will have grown to approximately 28,000 to 29,000 subscribers. Further upside is apparent should churn continue to improve – churn reduced from 27.13 per cent in financial year 2014 to 23.58 per cent over the first half of financial year 2015. Churn improvements become increasingly value accretive as the firm’s subscriber base continues to grow.
Source: MIM analysis
The Montgomery Fund and the Montgomery [Private] Fund hold positions in Altium Limited (ASX: ALU).