Amigo Mike, just two words: exclusive and IBM: Egan Systems (EGNS)
I know we talked about this company earlier and I know you liked the story. Well today they announced a very important strategic move for their business, which makes them a broad based company instead of a small based company.
They have set up an alliance with CA to use their tools to cover the market. Now this news is most important for their big China Joint Venture because right after that news it was announced that they got the approval of the Chinese Government to accept business in China. Now the sales people over there can go to work. And what wasn't mentioned anywhere, but is very important is the fact that they are EXCLUSIVE overthere (closed market) and now they can do the IBM MARKET. CA or other firms are not allowed to do the business over there, EGNS is with the Joint Venture.
So think of all the government departments over there and the banks.
But was the problem with EGNS. They were in a very narrow market and now they are in a broad market. With these tools of CA they can enter the IBM market which is huge in China.
Now my feeling is that this is the news they were waiting for in China, that is why we saw the immediate approval in the news this afternoon.
Now Tech 2020 is ready to handle almost all of the business and now they are allowed to. Now it is up to the sales people over there to get the contracts in. When we see contracts getting in we will see a movement in the stock.
Now about the news. It only hit up on Bloomberg and not on Dow Jones which should have more impact because it is cheaper and more traders use it. I called Dow Jones and asked them but they told me that they were too busy with all the earnings announcements. There was also CA news with Sun Micro which also didn't hit up on the Dow Jones, so that was even more important and even didn't hit up.
So, the structure of EGNS has changed dramatically. They have positioned themselves very good and now they can handle the business.
Oh, I needed to say another word, which I mentioned to you in previous posts: MAINFRAME BUSINESS. Now Ed is going after mainframe business in the US also and in China. Those contracts are much bigger and they are able to let different machines run together next to each other and do big business in a short period of time. He is going after the lines of code now.
I feel good with this news because it was essential to their strategy. And again, EGNS has always come up with what they promised and now my expections are justified. I am very positive for this company, with no debt and money in the bank. We will see this stock move with unexpected announcements of real contracts.
I also expect this sector to be very attractive again and then we will see the better companies in the Y2K index profit of it, under which EGNS.
Please, if anyone has any comments I would like to hear them. Sorry for the long post.
Rene. |
