Fidessa – Old Faithful?

Ascending Triangle

Fidessa is not an easy company to write up unless readers understand a reasonable amount of background industry behind financial markets, aiding these markets to perform efficiently while at the same time adhering to extensive regulatory compliance.

Most readers don’t give much thought to how a share price is derived; it’s just a number – well two numbers: one to buy and one to sell a particular share and they move (hopefully in the desired direction).

Fundamentally a share price rises if there is an excess of buyers over sellers in accordance with normal supply and demand characteristics. Likewise when sellers outnumber buyers share prices fall.

In reality there is a plethora of actions going on behind the scenes to get to an accurate representation of what a share price should be. A huge amount of information has to be assimilated in deriving correct values.

Fidessa provide software solutions that help oil the cogs leading to correctly priced shares and have been winning awards for their efforts. For 2 consecutive years their platforms have picked up both London and Asian Futures and Options World (FOW) categorised awards.

Recently Fidessa have been an instrumental force behind connecting mainland China with Hong Kong as China embraces more capitalism and free flow of financial data necessary to endorse this new(ish) Chinese outlook.

Technically Fidessa is interesting on two fronts: 1) Shares have been stuck in a band between circa £20 to £24 since April 2014 but have been forming an ascending triangle formation since October 2014. This is usually a good sign when breakout occurs to the up, which has recently happened and 2) Buying Fidessa at their December low is a good time of year for Fidessa shares.

Buying Fidessa at their December low and selling at highs between January and May has yielded an average return of 36% since 2009. Should these shares repeat past performance then a new record high above circa £27 will be set in motion with real potential to run up to £30.

Fidessa could just turn out to be old faithful (as half of their name suggests in Latin)!

Date Company Status Mid Price Target 1 Target 2 Target 3 Target 4
08/01/2015 Fidessa Initial write up £24.88 £27.87 £29.80 £32.90 £34.40

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