Solium Capital is a buy, says M Partners analyst Shuttleworth

Last November, Solium Capital partnered with Barclays’ Corporate & Employer Solutions unit to create a white-label version of the Solium Shareworks platform that will be offered to Barclay’s more than 8500 clients. When you grow your revenue from just over $11-million in 2008 to $46-million in fiscal 2011, you’re bound to attract the street’s attention.

This week, Solium Capital (TSX:SUM) found more eyeballs looking towards it as M Partners analyst Ron Shuttleworth initiated coverage of the Calgary-based software company, which has proved successful in sorting out the regulatory tangle that is stock-based compensation for companies in Canada, and is now turning its eyes to the rest of the world.

Shuttleworth says the administration side of equity compensation is extremely complex because of changing regulatory environments, employee churn and localized rules. He says 97% of companies compensate their employees with equity compensation, representing approximately 100-million people in America alone. The analyst anticipates Solium Capital’s global footprint will grow as new products are added to its SaaS platform, and investor awareness of the virtually unknown company increases. In a research report to clients yesterday, Shuttleworth initiated coverage of Solium Capital with a BUY rating and twelve-month target price of $4.75.

Founded in 1999, Solium Capital counts Transalta, Shaw Communications and Shell Canada -in fact 75% of the top 100 companies listed on the TSX – among its clients. Last November, the company partnered with Barclays’ Corporate & Employer Solutions unit to create a white-label version of the Solium Shareworks platform that will be offered to Barclay’s more than 8500 clients.