Business software company Lawson Software Inc. said recently that its board approved another $200 million to repurchase shares of the company's common stock.

That brings its total available buyback authorization to $239.5 million.

The board had authorized another $200 million by April 2007, and so far the company has spent $160.5 million to repurchase 18 million shares.

The stock trades for 10x cash flow.

Business software company Lawson Software Inc. said recently that its board approved another $200 million to repurchase shares of the company's common stock.

That brings its total available buyback authorization to $239.5 million.

The board had authorized another $200 million by April 2007, and so far the company has spent $160.5 million to repurchase 18 million shares.

The stock trades for 10x cash flow.

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Buy - Price 7.55 on March 19
by Henley & Co.

We see a 20% three-to-five-year growth rate for Lawson, about equal [to other] enterprise-application platform companies. We are giving Lawson a slight premium [based in part on new-product announcements and key contract wins] of 5% to 10% for strong execution in the past few quarters, as well as their new initiatives, new products, new channels and SaaS and On Demand initiatives. Using a 30 multiple, and our EPS of 43 cents for calendar '08, we believe a 13 target is more than achievable. Market-cap: $1.4 billion.

The software sector, in particular, seems ripe for consolidation. Cowen & Co.'s Peter Goldmacher last week noted that the applications-software group is down 21% this year. His view: That's created an opportunity to buy quality names on the cheap. Goldmacher offers up four examples: Ariba (ARBA), Epicor Software (EPIC), Lawson Software (LWSN) and DealerTrak Holdings (TRAK). All, he says, offer "M&A appeal."

Michael Dell

Own it

Upgraded by Matrix Research from Strong Sell to Sell

From Barron's 5-28-07

"Lawson's Q score among investors could soon jump. It has made a promising acquisition of a like-sized European company that should allow it to tap new products and markets, upgrade its sales effort and accelerate a recent drive to lift its operating efficiency. Most important, the middle market for resource-planning software, which handles everything from accounting functions to manufacturing processes, is now the fastest growing segment for corporate software sales. And it is one that Lawson's bigger brethren haven't as yet been able to dominate."