MGIC - Magic's Growth Strengthens Asseco Case But Receivables Are Bloating

• We follow Magic Software because it's held by Asseco Poland, one of our favourite Eastern European companies that has sold off over the Russia-Ukraine conflict.
• It continues to deliver strong organic growth and generate a lot of repeat business.
• While professional services is growing in the mix, and we'd prefer strength in the software side, Magic demonstrates continued demand for digital transformation.
• Q4 was especially strong despite difficult comps, delivering double-digit growth, but operating cash flow weirdly declined.
• The dividend is also attractive for a tech company, but we'd have liked analysts to question the receivables situation before we recommend buying.

For further details see: