Here's a reputed one. I think this says it's a paid advertisement, but somewhere in the body it says they applied for Nas listing and expect to get it before end of year. It's not on my buy list, but could be worth a look. It seems to be selling.
investor-list - analystgroup.com
*******Special Report******** Vol. 1, No. 12, October 1, 1999
analystgroup.com
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analystgroup.com initiates its coverage of Virtual Technology Corp. (OTC
BB: VTCO) with a "buy" rating
Virtual Technology Corp. (OTC BB: VTCO)
Recent Price: $2.25
52 Week Range: $1.25 to $10
Daily Average: 96.3 K
Outstanding shares: 29.0 million
Float: 8.7 million
Market Cap: $65.3 million
Projected Revenues (next 12 months): $145 million-$200 million
Projected Revenues (next 12 months): $0.02 to $0.05
Held by Insider and Management: 70%
Held by Institution: 0.03%
Rating: Buy
12-month Target Price: $10
Company Website: vtechco.com
Company's Business Background
Since the recently completed acquisition of Graphics Technology, Inc.
(GTI, graphicstech.com), Virtual Technology Corporation
(VTCO, http:///www.virtual-world.com) has been emerging as a leading
international E-Commerce distributor of technology related products. The
company is the parent of two complementary business units:
Virtual-world.com and GTI. Both units provide computer manufacturers with
channels to deliver their products to the end consumer. Virtual-World.com
provides products to the end user by purchasing products directly from
manufacturers or from distribution partners. GTI provides manufacturers
with a distribution channel to sell their products to dealers, resellers,
value-added resellers and integrators who then sell them to the end user.
VTCO's management directs the overall business and provides integration
and leadership to the two business units. The Company has a deep product
range and provides approximately 60,000 hardware products from over 1,000
different vendors and manufacturers, over 100,000 software titles and over
25,000 office products. Virtual-world.com offers an online specialized
store that is intended to provide one-stop shopping for its targeted
domestic and international customers, 24 hours a day, seven days a week.
Virtual-world.com's online store features a fun, easy to navigate
interface, competitive pricing, extensive product information and powerful
search capabilities.
Most major brands include IBM, Compaq, Hewlett-Packard, Max, Diamond
Multimedia, 3Com, Cisco, Sony, Hitachi, Acer, Iomega, Canon, and others.
The company serves over 10,000,000 page views from its web site which
equates to over 250,000 unique visitors per month. Sales have been
explosive in the past two quarters, up 1,600% over the previous year.
Sales are made to a mixture of groups including businesses, educational
institutions, and retail clients. The company also operates
vtcoauctions.com. On September 13, VTCO announced that it has
launched its UK-based shopping site virtual-world.co.uk. With
over 30,000 hardware products and over 100,000 software products
available, management believes that virtual-world.co.uk will be the
largest ``e-tailer' for the European Community offering the largest
on-line selection of technology products in Europe.
The Market
The Internet has emerged as a mass communications and commerce medium
enabling hundreds of millions of people worldwide to share
information, create community among individuals with similar
interests, and conduct business electronically. The number of Internet
users could grow from 100 million in 1998 to 320 million in 2002
worldwide. In the US, this number could grow from 35 million in 1998 to
100 million in 2002. Growth in Internet usage and web commerce has been
fueled by a number of factors, including (i) a large and growing installed
base of PCs in the workplace and home, (ii) advances in the performance
and speed of PCs and modems, (iii) improvements in network infrastructure,
(iv) easier and cheaper access to the Internet and (v) increased awareness
of the Internet. In addition to its emergence as a mass communication
medium, the Internet has features and functions that are unavailable in
traditional media. These enable online merchants to communicate
effectively with customers and advertisers to target users with specific
needs and interests. As a result, the Internet has emerged as an
attractive medium for advertising and electronic commerce.
Forrester Research estimates e-commerce in this segment to grow from $48
billion in 1998 to $1.3 trillion by 2003 or 9% of all US sales.
Online 1998 sales for computer related products reached $4.6 billion
on total sales of $8.2 billion, and Forrester estimates this sector to
grow to $18 billion in 1999.
VTCO' existing operations should benefit from the explosion in E-commerce
activity. The tremendously favorable trends in the E-commerce industry
are projected to continue going forward for decades to come. After the
GTI acquisition, we believe VTCO has been well positioned itself to
compete in the marketplace against other major companies, including:
Internet - Cyberian Outpost, Buy.com, Egghead.com; Direct sellers -
Compaq, Dell, Gateway; Traditional retailers such as CompUSA, MicroCenter,
Best Buy; Mail order: PC connection, CDW, and Micro Warehouse. But we
believe VTCO can be one of the winners, as VTCO has superior management
and an impeccable industry reputation.
One of major VTCO's Internet initiatives is to form strategic alliances
with established Internet companies, thereby penetrating the market,
releasing new products and launching new services. Recently, VTCO has
partnered with CNET (Nasdaq: CNET), ZDNet, PCWorld, Amazon.com (NASDAQ:
AMZN), Warzone.com, dbusiness.com, Digital River (NASD: DRIV),
GameCave.com, Cosmoz.com (OTCBB: CMOZ), United Stationers Supply Co.
(Nasdaq: USTR), the University of Minnesota, the Southwest Regional
Service Cooperative, ibuyer.net, Juno Online Services, Inc. (NASDAQ:
JWEB), Microsoft (NASDAQ: MSTF), IBM (NYSE: IBM), the Central Indiana
Education Service Center, and Auction Universe (a Times-Mirror Company).
Summary
The industry is highly competitive. Furthermore, due to technological
advances, commercial products are constantly changing, rendering some
products obsolete. However, we believe the Company has established a
brand name for its web site, which is respected in the E-commerce
industry.
VTCO has superior management. Management has proven experience in
creating companies through both organic growth and acquisition. On Feb.
16, 1999, VTCO filed its 10-SB and applied for registration on Feb. 19th
with the NASDAQ National Market System for listing on the exchange. We
believe the company should be able to get listed on NASDAQ by the end of
this year. The listing will significantly improve the company's
recognition in the investment community.
The Company should conservatively experience significant financial
growth through fiscal 2001. After the GTI acquisition, we are
projecting revenues for the fiscal year ending January 2000
at approximately $100 million and a slight loss on earnings per share
of ($0.13). For the fiscal year ending January 2001, we are
projecting revenues to jump 45% to100% to $145 million to $200 million and
positive earnings per share of $0.02 to $0.05. Both Internal growth and
acquisition should equally account for the revenue and earning growth.
In our opinion, based upon current stock price levels, we believe VTCO
stock should be purchased by investors associated with the Internet
stocks. Online resellers typically trade at a market valuation of1.5x -
3.0x projected sales and, therefore, VTCO appears to trade at a deep
discount to its peer group. Over the next 12 months, we are projecting a
target price of $10, or1.5x-2.0x sales, based on 29 million shares
outstanding.
We view VTCO as an excellent growth company with exceptional potential for
capital appreciation over both the immediate and longer term. As industry
and investor awareness of VTCO increase and contracts and alliences are
signed and announced, VTCO's shares should move much higher in the coming
months.
Technical Analysis
Based on the technical position and business plan of VTCO, we
believe the stock price has the potential to appreciate to exciting levels
in the near future. The stock has been severely beaten down over the past
9 months after trading at $10 a share last January. Given this tremendous
oversold, severely undervalued situation, we see substantial appreciation
potential of the stock price both from revenue growth and increased
recognition. This could be multiplied if investors come to realize that
the company is going to be involved in this extremely high growth
industry: online retailer.
Bearing in mind that significant company developments have and will occur
this year, along with industry projections, leads us to believe that VTCO
is an excellent investment opportunity. Last January, the stock peaked at
$10 per share. Since then, the stock price has been declined as the
company underwent major developments. During the past 9 months, the price
has oscillated and apparently has bottomed out at $2. During the past 1
months , trading activities suggest that an accumulation is going on and
the stock price is slowly moving up. We believe this as an
accumulation/consolidation phase of development prior to an upward
movement in price that could occur as the Company's business plan
materializes this year. We don't see much downside for the stock which is
traded in the range of $2.00. We believe the stock is an outstanding
investment opportunity and is at an excellent
buying price considering its short and long-term potential. Our short-term
(3 months) target price is $4-$5 and long-term (12 months) target price is
$10.
Conclusion
VTCO has aggressive plans to become a leader in the emerging e-commerce
industries. Key factors mark VTCO as an outstanding investment
opportunity: (1) huge potential of significant revenue and earnings
growth, (2) capitalization of strategic partnerships with major industry
establishments, (3) ability to compete, (4) new products, and (5) key
management. These astonishing factors along with the fact that the
Company will capitalize on a major strategic alliance with a major web
portal lead us to believe in the future success of the Company in this
potentially explosive industry.
VTCO is moving fast to create brand identity among consumers and
visibility among institutional investors. Leveraging on relationships
with the largest wholesalers to offer scale, and logistical support
and distribution, VTCO is capitalizing on strategic advertising, cross
marketing alliances, and distribution through digital and cable
channels. While industry margins continue to be squeezed, VTCO's
integrated approach, established infrastructure and financial
management should survive margin deterioration and justify a
substantially higher valuation. There are risks, but management
appears to be firmly in control.
We believe the stock is highly attractive to speculative investors and
therefore rate this stock a buy. We believe that VTCO story has not yet
come out and come to the attention of the investment community. It's
extremely undervalued when we consider its huge potential in the emerging
and high growth industry. By the time the investment community wakes up
to what's happening at VTCO, the share price could easily be well over
$5.00 per share. We have an absolute ground floor opportunity to get in
before the institutions and fund managers, who will surely be looking to
get into this company as the company's sales explode and the stock gets
listed on NASDAQ.
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