StockHouse News
Market Embraces More Good News From MGI
Natl_Post - 11/25/99 10:06:12 AM
Thomas Hirschmann
Financial Post
MGI Software Corp. [T.MGI] remained firmly in the market eye yesterday, touching a
new intraday high.
The small technology company has been the subject of a spate of announcements, taking
its share price (MGI/TSE) up 97.4% in seven days. It closed up $2 to $15 yesterday, off
the day's high of $15.20.
Yesterday's rise was sparked by news that Hitachi Ltd. [HIT] of Japan has licensed
MGI's software, Pure DIVA, which enables a personal computer to perform like a
television. The Hitachi computer with Pure DIVA will be able to pause live TV
broadcasts, digitally record shows and play DVD movies.
"It confirms that PC and TV are converging," said Paul Bradley, an analyst at Canaccord Capital Corp.
"It also affirms MGI's
technology because you have a well-known company selecting the software."
PCs are already capable of receiving broadcast television and playing DVDs, but Mr. Bradley said
MGI's solution is a software
one; other solutions rely on hardware. A software solution purports to be cheaper and more flexible --
attractive in the PC
business, with its squeeze on margins.
Mr. Bradley said despite the Hitachi contract, it may be some time before PC and TV convergence is
felt on this continent.
The Richmond Hill, Ont.-based company has two areas of focus: the digital video Hitachi licensed and
imaging products.
Mr. Bradley sees short-term gains being made in the imaging products because they are already
available. They include the retail
photo editor Photosuite and e-commerce software to zoom in on pictures to better view merchandise
online. He said a series of
patent announcements caused the stock run-up before the Hitachi news; this helped secure MGI's
position in the market.
In a recent report, Alpha-Amar Ba, an analyst at Groome Capital Corp.com, noted that MGI has 29
patents pending or issued in
imaging technology. The report also mentioned compound annual growth rates of 181% for
DVD-ROMs, 100% for digital video
editing and 58% for PC-VCRs -- all MGI's core business.
The analyst has a "buy" rating on the stock, with a 12-month target price of $6.25 and a 24-month
target of $15. Canaccord's Mr.
Bradley has a "strong buy" recommendation, with a 12-month target of $17.50 a share. |
