Nuance (NUAN)

Nuance (NUAN) has been a timely and solid addition, rising about 40% following our entry back in December. The company has showed some early success in changing to a subscription model and—especially recently—fresh rumors of a possible buyout (Samsung emerging as a potential suitor) or even a move to go private added to the share price gains.

On July 1, NUAN shares were briefly hit, though. One analyst stated, “… Nuance’s product line covers markets ranging from healthcare (still over half of op profit) to mobile to enterprise, and a buyer may only be interested in parts of the business. Also, the fact the company’s software and services support a wide array of platforms (iOS, Android, Windows, etc.) means a sale to a suitor such as Samsung could alienate some existing clients.” In addition, Apple looks to be out of the running, rumored to be developing its own voice platform.

The company is attractive even if it loses Apple (it just inked a big deal with Oracle, and I see broader incursions into the new car market). I expect earnings to continue rebounding as well.

Chris Temple, The National Investor, www.nationalinvestor.com,  847-986-6320, July 5, 2014

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