Q: Needing to sell either SAP or PLC (both down). Which one better to keep and why?
5i Research Answer:
Recent weakness at SAP and higher growth potential at PLC gives the nod to keeping PLC. Now, it is a much smaller company so this involves being comfortable with small caps. But PLC's potential growth rate in our view is much higher and it could accelerate this with more acquisitions. Valuations and yields are somewhat similar so it comes down to growth. PLC has underperformed over the past year, however.