TORONTO (Reuters) - Shares in D+H Corp rose on Tuesday after the Canadian financial technology company reported better-than-expected quarterly results and dismissed a hedge fund report questioning its growth prospects and accounting practices.
Toronto-based D+H, whose shares see-sawed in early trading, were up almost 1.5 percent at C$32.56 on the Toronto Stock Exchange. The company’s stock fell 17 percent on Monday after news of the hedge fund report surfaced.
“We are deeply disturbed by the false and misleading allegations contained in the report and intend to vigorously defend ourselves and D+H against these assertions.” D+H Chief Executive Officer Gerrard Schmid said on a conference call.
The financial services firm said it believes the hedge fund is engaged in short selling of its shares, and characterized the report as containing numerous inaccurate, unsubstantiated and misleading statements. It advised investors to review its filings and not rely on the hedge fund report.
D+H also reported a third-quarter profit of 62 Canadian cents per share, above the average analyst estimate of 60 Canadian cents, according to Thomson Reuters I/B/E/S.
“We see little evidence to corroborate the (hedge fund) author’s view that D+H is facing near-term earnings headwinds,” National Bank analyst Trevor Johnson said in a note to clients.
Johnson reiterated his “outperform” rating and C$49 price target on the stock.
In March this year, D+H acquired global payment services provider Fundtech for $1.25 billion in cash, in a bid to expand its service offerings aimed at global financial institutions and large U.S. banks.
The move followed its $1.2 billion acquisition of Harland Financial Solutions in 2013, a deal aimed at broadening its offerings for online and mobile banking, branch automation and commercial lending, primarily around community banks and credit unions.
Additional reporting by Shubhankar Chakravorty in Bengaluru; Editing by Maju Samuel and Paul Simao