I’ve been looking at SAP SE and trying to evaluate it from a value investing perspective:
\-Strong moat
\-Enterprise software deeply embedded in customers’ operations
\-Recurring revenue
\-High switching costs
\-Strong balance sheet
\-Consistent free cash flow
The stock has also pulled back from previous highs, while the underlying business still appears to be growing.
One thing that makes me more confident is that SAP is arguably Germany’s most important technology company. Germany has very few global tech champions, and SAP is a strategic national asset. I don’t mean that the government would literally bail out shareholders, but it’s hard for me to imagine Germany allowing one of its crown-jewel companies to become irrelevant.