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(Sharecast News) - In his 'Inside the City' column for the Sunday Times, Ben Woods was looking at the earnings revolution that is cloud computing, and pointing to Microsoft's successful pivot under Satya Nadella.
Woods noted that the "Nadellaissance" began when the chief executive began the company's shift towards the cloud in 2014, leading to Microsoft becoming the most valuable company in the US this month, at $1trn.
Closer to home, AIM-traded software developer WANdisco was also making its own moves in the cloud space, with Woods explaining that the firm helps companies move what it calls "live data" to the big cloud providers, such as Microsoft Azure and Amazon Web Services, without the need to sever access to their servers.
Previously, investors and analysts were hopeful of WANdisco's focus on "live data", but the company had since fallen short of those expectations.
Since listing in 2012, its value has plummeted to £233m from a peak of £1bn, with Woods pointing to a market that was not growing as rapidly as anticipated as being behind the fall.
WANdisco has churned through its cash balances and subsequently held a series of rights issues to ensure its viability, and Sheffield-born, Silicon Valley-based, vineyard-owning chief executive Dave Richards was briefly booted in 2016 amid building concerns.
Weeks later, Richards staged his own coup, ousting the chairman who had done the same to him, with Woods describing the episode as "testing investors patience".
WANdisco's shares have fallen 59% to 504p in 12 months.
But the lack of keenness from investors has apparently failed to dampen Richards' spirits, with the company raising $17.5m in February in a placing intended to strengthen the firm's relationships with the cloud computing giants in the US.
At the annual results release in April, the chief executive claimed to have made "substantial progress" in "unlocking the significant potential" of cloud computing, adding that WANdisco had a "strong pipeline" of deals, along with partnerships with the big boys - including Microsoft.
But Woods said such optimism appeared to be "overdone", with sales falling 13% to $17m in the year ended December, and pre-tax losses widening to $19.4m from $14m.
Those numbers would have looked bleaker if it was not for the adoption of the new IFRS 15 accounting standard, which required WANdisco to book annual subscription sales up front.
Without that change, the company's sales would have been down 38% at $12.2m, with losses swelling to $24m, according to Woods.
There had been a number of other warning signs, too, with WANdisco failing to disclose the value of its "bookings" - that is, the amount of money a customer had committed to spend - in April.
Short sellers were beginning to circle as well, with 1.8% of WANdisco's shares said to be out on loan.
"WANdisco enjoyed a mini renaissance in the first quarter, with sales rising 38% to $4m as it moves from a licence to a subscription-based model," Ben Woods wrote.
"However, the road ahead looks tough.
"With 40 competitors doing similar things, WANdisco can hardly claim to have the market to itself. Sell."
Over in the Mail on Sunday, Joanne Hart took a break from her usual focus on AIM-traded small caps for her 'Midas' column, and instead looked at the FTSE 250 listed Sequoia Economic Infrastructure Income Fund.
The fund invests in a wide range of industries and markets, with its portfolio including Welcome Break-operated motorway service areas in the UK, Scandline ferries in the Nordic countries, and water and electricity firms in the United States.
In total, Sequoia had 72 investments across Europe, North America, Australia and New Zealand, with Hart claiming that the shares - currently at 110p - should deliver "solid growth" and "generous dividends" in the coming years.
Just last month, the company raised its annual target to 6.25p from 6p, which meant the stock now boasted a 5.7% yield.
Hart explained that the fund was established in the aftermath of last decade's financial crisis by four "highly experienced" managers, looking to build an opportunity with "relatively low risk" and "relatively high returns".
She said the group had managed to succeed in that lofty goal so far, adding that none of its investments made up more than 5% of the portfolio, with a diverse range of sizes, types, sectors and locations as well.
One key difference was that Sequoia invested in a company's debt, rather than its equity, meaning that if an investment collapsed, Sequoia was further ahead in the queue of creditors.
It also focussed on infrastructure investments, which Hart characterised as being backed by "solid assets", including schools, sea ports and airports, wind farms, power stations, and more contemporary infrastructure assets including data centres.
In the UK, for example, it owned bonds in Heathrow, while in the Pacific Rim it had lent money to Hawaiki Cable, which operates undersea cables linking the US West Coast with Australia and New Zealand.
The company, headed by former Rothschild banker Randall Sandstrom, listed in 2015 at £1, and since then, its value had ballooned to more than £1bn from £150m.
Sequoia has raised cash from the stock market a number of times in order to fund its growth, and was about to ask investors for another injection, having apparently identified a number of potential, "robust" investment.
As it became larger and better known, Hart reckoned its ability to access "the best transactions" would increase.
She also pointed to the fact that over its more than 100 investments, none had defaulted on its debt.
"The word 'fund' may have acquired unwelcome connotations following the Woodford fiasco but Sequoia is a very different beast, in structure, approach and focus," Joanne Hart wrote.
"At £1.10, the shares offer attractive long-term rewards - and a juicy dividend too."
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