One to Watch

Autonomy1,823p -46pScotsman says BUY

AUTONOMY is the market leader in providing software to automate the classification and management of data. In 2009, the company generated revenues of $740 million (483m) from more than 20,000 clients.

Autonomy has delivered earnings growth in excess of 400 per cent over the past four years and we believe it is capable of continuing to provide above-industry levels of performance.

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The demand for its products is supported by regulatory rules in the US, which require companies to record, archive and maintain data records relating to their operations. Autonomy is the market leader in this field and we expect to see double-digit revenue growth in this area over the next couple of years.

Alongside this organic revenue growth, Autonomy has made acquisitions in recent years that have allowed the company to move into a number of new niches.

Autonomy's stock trades on an estimated 2011 price-earnings ratio of nearly 20 times. While this is slightly higher than its peer group, we feel it is justified by its organic growth opportunities, proven track record of acquisitions and strong balance sheet.

• This article is for information and discussion purposes and does not form a recommendation by the manager to invest or otherwise.


3,635p +12p

Broker says SELL

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Galliford Try

380p +7p

Broker says BUY

GALLIFORD Try remains KBC Peel Hunt's only "buy" recommendation in the house-building sector. The broker said: "Galliford Try dares to be different, running its housing business through an aggressive deployment of growth capital. The shares are oversold at this level."