I've dipped my feet in again and bought a small parcel on the basis that:

1. Government software procurement cycle potentially playing catch up after COVID disruptions.
2. The switch to capitalising R&D at the next financial report will catch the market/algorithms off guard even though it was well telegraphed
3. The possibility that their huge R&D spend over the last 5 years on SaaS products will start to bear fruit as customers continue to migrate from on premise hosting to cloud services.
4. Their major competitor Micro Focus Content Manager (aka TRIM) now has only 1 staff member in Australia according to LinkedIn so it's a 2 horse race between Objective ECM/Nexus and Microsoft SharePoint.

One concern is that recently there have been no major customer wins according to their website but maybe they don't announce them all.

https://www.objective.com.au/resources/news-release

I'd be interested if anyone strawpeople have a valuation based on the switch to capitalising R&D.

@Valueinvestor0909 for low liquidity stocks could a buy back be used to artificially keep the share price up over the end financial year period so that bonuses based on share price are paid? Cynical of me I know. Just wondering.

Regarding the quality management, I understand that Tony Walls is the CEO and chairman which is not best practice in general IMHO. I don’t believe there is a COO since Stephen Bool retired. The CFO will be busy with their next acquisition target. Do you ever see an org structure (eg Technology One does have) so it feels like a one person show in AGMs. Tony must be near retirement age but any CEO replacement in sight? That’s fine if he sells the business as the majority shareholder but will the growth continue then?

I think their flagship product ECM is a competitor to Microsoft SharePoint which seems to be everywhere these days, especially in government. So could their product become someone else’s feature?

I’m still interested in buying this company again in future but I’d like to see their next annual report first

What am I missing with Objective Corp? Great business, but on a Price to sales of ~8.8 and a PE of 60 it seems over-priced. Earnings growth has been lower double digit for a while, and i think it's hard to assume much more than 15% average annual growth over the coming 5 years or so. 

Been in this stock for about 10 years now and Tony Walls always delivers over the long term. Have not bought any more for the last three years as the stock has become so illiquid, with the top 10 Shareholders owning 90% of the company and minimal selling. 

Trim still have the lion share of the market but from personal experience have really dropped the ball on innovating and improving their product, I guess that's what happens when your sold to HP and now Micro Focus.  So objective have a inactive main competitor and a stream of other products that are still in their infancy.  We should see more steady growth over the next decade.