One software niche that I think will do exceptionally well in the next
couple of years is the Help Desk/Customer Support niche. As large
corporations struggle to reduce costs and meet the support challenges
of ever increasingly complex software/hardware (e.g. Win95), help desk
software is being viewed at many companies as mission criticle.
Some estimates put this industry revenue growth rate at 40-60%, and
all companies in the group recorded earnings growth over 100% this year.
Remedy (RMDY) is ranked by IBD with an EPS growth rank of 99.
They seem to be the market leader and the stock as swelled nearly
50% since Thanksgiving. Their Action Request System (ARS) is used
primarily by large companies supporting internal customers. www.remedy.com
Software Artistry (SWRT) markets the SA-Expert system. I think it
is the most flexible of the systems and it can be used to support
internal and external customers. The company has recorded 114% earnings
growth last quarter. www.softart.com
Inference (INFR) sells the CBR2 system, which I think is used at
Compaq and Microsoft to support their customers. Just yesterday the
company announced an extension to their product line that will allow
for customer support over the World Wide Web. Their stock as done well
following the announcement, up about 2 to over 19. Broderbund will
support their customers after Christmas using Inference's
new web software. www.inference.com
Other players in this niche are Astea International (ATEA) and
Scopus Technology (SCOP). I don't know as much about them.
Questions for those of you who might know:
1. Does anyone out there have earnings estimates for next year on
these companies? Analyst recommendations? These are thinly traded and
poorly covered issues and I'm having trouble getting info.
2. Is there any one out there who has evaluated or used these products?
I want to know who has developed the best tools in the market?
3. Can anyone tell me how to determine fair market value for these
types of stocks. PEs are relatively high, but so is earnings growth.
How does one know what price is fair? |
