(Analyst is MD Porcelain) New York - Unless you work in a purchasing or manufacturing organization - you may have missed the i2 Technologies, Inc. (Nasdaq:ITWO) story.
According to Fortune Magazine, i2 is one of the fastest-growing American companies. i2 is dominating the intelligent software market that focuses on supply chain management and related business process applications. The stock currently trades at $76 with a PE of 223 (yes two hundred and twenty three).
We believe that the i2 growth story is real, compelling and because we believe consensus expectations are too low, we are initiating coverage on i2 Technologies with a long-term BUY rating.
Here are some highlights of the Company.
Providing Bottom Line Results to Clients - i2 focuses on providing software products for supply chain management and related business process optimization applications. In other words, i2 helps companies run their business better. For instance, the Company's i2?s RHYTHM Strategic Planning solution enables executives and analysts to
plan scenarios,
set goals, and
monitor the performance of the enterprise.
i2's sales force is so confident in its software part of the license fees paid to i2 are based on economic returns and productivity savings actually earned by the client.
New web based products - i2 recently introduced TradeMatrix an eBusiness portal that allows buyers, sellers, designers and service providers to interact. For example, buyers can procure both direct and indirect material and services. The software is built on open standards, enabling almost any company to instantly share in the efficiencies of a joined network. Companies that support the portal include AT&T, Acer America, Boise Cascade Office Products, Exodus Communications, Hewlett-Packard Company, IBM Corporation, Ryder Integrated Logistics and Sun Microsystems. If successful, this product will contribute significantly to the bottom line. We believe the product will be.
Financial Performance is Terrific - i2's revenue has risen nearly tenfold over three years as manufacturers have sought out its products. For the first three quarters of 1999, i2 reported total revenues, net income and diluted earnings per share of $395.8 million, $12.9 million and $0.16 per share, excluding charges of $4.8 million associated with acquisitions. These results compared with year to date 1998 total revenues of $255.6 million, net income of $8.8 million, and diluted earnings of $0.11 per share, excluding $7.0 million in charges for various acquisitions made in 1998.
Stock Performance is Terrific - The stock of i2 has skyrocketed and make no mistake, it is not an inexpensive stock. Fluctuations can range from 10% to 15% on a normal day. The stock does have a short falling that approximates 3 days worth of trading. We hope they are wrong. Our two year target price is $125.
¸ Copyright. The Independent Adviser Corporation.
i do not have a position in this one.
regards. |
