Princeton, New Jersey, Aug. 18 (Bloomberg Data) -- MGI Software Corp.
(MGI CN) was reiterated ''buy'' by analyst Alpha Ba at Groome Capital Inc. The 12 and 24-month price targets are $6.25 and 15., respectively.
Here's an abstract of the report
MGI Software, Lucent & Microsoft to offer seamless
solution to OEMs
canoe.ca
Software
Overview
MGI Software Corporation (MGI-T) supplies personal computer
photography, video and DVD software to home and business PC
users. MGI distributes its products to 25 countries through retail
and original equipment manufacturer (OEM) channels and is
positioned to serve the Internet photo and video software
markets.
The Event
This morning, MGI announced it is working with Lucent
Technologies (LU-N) and Microsoft (MSFT-O) to deliver MGI
VideoWave, its video software, using IEEE 1394 technology.
Lucent's advanced chip FW323 aims to drive down the cost of
installing IEEE 1394 by eliminating board-based hardware.
Lucent, Microsoft and MGI are partnering up to ensure
compatibility and operability between the Lucent 1394 Integrated
Circuit, Microsoft's Windows operating systems and MGI's
VideoWave. In this video software, MGI owns the first software
product supporting IEEE 1394 in the video-editing arena.
The Implications
The implications of this announcement are twofold. First, we
believe this deal strengthens MGI's position in the eyes of PC
manufacturers. With this agreement, we believe MGI will be able
to strike bundling deals with large PC OEMs, such as IBM, HP,
Dell and Gateway. In June 1999, MGI announced a bundling
agreement with Compaq Computers whereby the PC
manufacturer will integrate VideoWave II into its high-end
Presario line of PCs supporting IEEE 1394 technology. We
discussed the Compaq deal in our Capital Ideas of June 16,
1999.
Second, this deal opens up MGI's potential market in the
video-editing segment, as the Company benefits from the
reduction in the costs associated with integrating IEEE1394 into
PCs. This FireWire technology allows the delivery of such large
datatypes as video-editing functions into computers at high
speed. By supporting Lucent's technology into VideoWave, the
integration of PCs, digital camcorders and VideoWave will be a
seamless one. Consequently, there is a real opportunity for PC
OEMs to offer VideoWave II, PhotoSuite II, PURE DIVA and
SoftDVD to their customers through bundling agreements with
MGI.
By working on standards with Microsoft and Lucent, MGI will be
able to offer its complete digital imaging solution through OEMs,
not only targeting top-end products but also low-end PCs. We
believe the Company is now in an advantageous position to
strike such agreements with major PC manufacturers.
Conclusion
In our Capital Ideas of July 9, 1999, we stressed our belief that
MGI will become the leader in the digital imagery market, at the
consumer and small business ends. We thus continue to like
the progress at MGI and reiterate our BUY recommendation on
the stock, with 12- and 24-month targets of $6.25 and $15.00,
respectively. An investment in MGI Software may be particularly
suited for investors with above-average risk tolerance, who are
seeking a potential for capital appreciation and who have
diversified investment portfolios. |
