SoftwareONE Holding (XSWX:SWON, Financial) (Switzerland) is a software and cloud technology solutions company that acts as a value added reseller (VAR). We believe VAR is an appealing business model that is poised to grow alongside IT budgets and that offers strong cash conversion rates. The company’s share price came under pressure when it indicated a desire to expand its services offerings during its annual earnings release. While additional services will pressure margins in the short term and lead to some near-term downward earnings revisions, we believe a well-executed expansion could strengthen the company’s relationships with its customer base and enhance the company’s value over the next three to five years.
From David Herro (Trades, Portfolio)'s Oakmark Intl Small Cap (Trades, Portfolio) Fund second-quarter 2021 letter.
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