CHRZ--- Info tech services & Solutions----value play
originally posted on Wednesday, Jul 28 1999 10:05PM EST on another thread.
(In an effort to put transfer some of our prior info onto
this thread)
CHRZ is a great deal. It had a big run up in from 1996 into the start of 1998 because
they do some Y2K remediation work and everyone loved those stocks, or at least felt
that they would make big money in them.
tscn.com.
CHRZ has come down from almost 55 in the start of 1998 to a low of 9 at the start of
april, that should be as low as it goes ( barring a 50% decline in the general mkt) It
rallied all the way back to it's 200 dma before starting on the latest sell off that has
brought us back to the buy zone.
CHRZ went to 12 at the start of July and retested it in the past few days you will note
the higher high on the RSI momentum Osc. this has made a higher low on the low 2
days ago than it made at the first low at 12 in early july so it has created a buy
divergence
tscn.com.
tscn.com.
fundamentally, it has a PE or 9.4 with a forward pe of 10.4 . It has a 5 year growth
rate of 47.5 %; and an ultra low .7 price sales ratio. so it is dirt cheap on a valuation
basis.
look at the impressive 1, 3 and 5 year earnings growth rate.
The most compelling part of the CHRZ story is that although it is seen by
many as only a busted Y2K stock. It has 8 distinct business segments. 7 of
which will be around and should continue strong after Y2K
Here is a business description from Zacks. note 8 business segments.
Business Description for COMP HORIZONS (CHRZ) 12/1997
General
The Company provides a wide range of information technology services and solutions
to major corporations. Historically a professional services staffing firm, the Company
has, over the past six years, developed the technological and managerial infrastructure
to offer its clients value added services including CHC's Signature 2000? solution for
the millennium change, client/server systems development and migration, enterprise
network management, document imaging practices, outsourcing and offshore software
development and maintenance ("solutions"). The Company markets solutions to both
existing and potential clients with the objective of becoming a preferred provider of
comprehensive information technology services and solutions for such clients. Solutions
engagements, which represented less than five percent of the Company's consolidated
revenues in 1992, accounted for approximately 33% of its consolidated revenues in
1997. The Company believes that the range of services and solutions that it offers,
combined with its worldwide network of 47 offices and subsidiary organizations,
provides it with significant competitive advantages in the information technology
marketplace.
In 1997, the Company expanded recently opened offices in Toronto, Canada and
London, England. Together with the offices operated by the Company's joint venture,
Birla Horizons International, the Company has established itself as an international
enterprise, with global capabilities.
The Company's clients primarily are Fortune 500 companies with significant
information technology budgets and recurring staffing or software development needs.
In 1997, the Company provided information technology services to 499 clients. During
1997, the Company's largest client, AT&T, accounted for 11.7% of the Company's
consolidated revenues, with no other client accounting for more than 8% of such
revenues.
With the trend in the commercial market moving towards fully integrated information
systems solutions, the Company offers its clients a broad range of business and
technical services as a service outsourcer and systems integrator capable of providing
complex total solutions. This total solutions approach comprises proprietary software
and tools, proven processes and methodologies, tested project management practices
and resource management and procurement programs.
The Company offers a range of information technology services and
solutions, which include (1) professional services staffing, (2) the solution
for the millennium change, (3) client/ server systems development and
migration,
(4) enterprise network management, (5) document imaging practices, (6)
outsourcing, (7) offshore software development and maintenance, and (8)
knowledge transfer.
(1) Professional Services Staffing: Providing highly skilled software
professionals to augment the internal information management staffs of major
corporations remains the Company's primary business. The Company offers
its clients centralized vendor management, supplying their staffing needs from
among the Company's over 3,100 software professionals. The Company is
committed to expanding its professional services staffing operations in
conjunction with its solutions business.
(2) Solution for the Millennium Change: CHC's Signature 2000? offering
combines an internally developed proprietary software toolkit, skilled
resources, proven methodologies, experienced project management, as well as
significant millennium project experience. It analyzes, locates, reports on, and
then restructures all programs and database definitions affected by the
absence of a century date field to permit processing of dates after December
31, 1999. The solution is customized for each particular enterprise and deals
with all collateral issues. In effect, CHC's Signature 2000? provides the
Company with an opportunity to facilitate field expansion, and century date
windowing, while simultaneously performing other systems upgrades such as
language conversions and platform migrations. In addition, CHC's Signature
2000? provides the Company a fully integrated testing solution across all
phases of the testing life cycle, including Testing Processes, Software Products
and experienced management and technical resources. CHC also provides a
workstation solution for the Year 2000, including Asset Management,
assessment and correction of spreadsheets and databases, correction to the
workstation clocks, and third-party vendor compliancy assessment.
(3) Client/Server Systems Development and Migration: The Company has the
capability to develop and implement open computer systems using
client/server architecture and integrating servers, mini and mainframe
systems, workstations, terminals and communication gateways into complete,
flexible networks. Such services include project management, selection of
viable systems platforms, creation of migration plans, development of
customized software applications, and systems and database integration. The
Company specializes in integrating local area network ("LAN") environments
into single heterogeneous networks and unifying enterprise networks into wide
area network ("WAN") environments.
(4) Enterprise Network Management: As application development migrates to
distributed systems platforms, so too must the disciplines of systems
management. The Company's enterprise network management offering is
comprised of experienced technical professionals whose only business focus is
the development and integration of centralized management platforms for
mission-critical distributed systems environments. The Company's staff
handles large-scale integration projects, including those requiring vendor
product integration and custom software development associated with
LAN/WAN monitoring and control, network asset management, software
distribution and help desk support.
(5) Document Imaging Practices: The Company offers an
open-architectured document management solution that enables its clients to
seamlessly image-enable existing applications that can reside on mainframes,
mid-range or PC environments. The client is able to obtain a total solution that
utilizes the Company's proprietary toolset, UNIDOC?, to provide customized
design, development and deployment for their document management needs.
(6) Outsourcing: Spurred by global competition and rapid technological change,
large companies, in particular, are downsizing and outsourcing for reasons
ranging from cost reduction to capital asset improvement and from improved
technology introduction to better strategic focus. In response to this trend, the
Company has created a group of regional outsourcing centers with 24 hour/7
day a week support, which are fully equipped with the latest technology and
communications, as well as a complete staff that includes experienced project
managers, technicians and operators. These professionals facilitate essential
data functions including: applications development, systems maintenance, data
network management, voice network administration and help desk operations.
(7) Offshore Software Development and Maintenance: For major U.S.
corporations under the constraints of downsizing and cost-cutting, offshore
software development and maintenance provides a high quality, low-cost
alternative to having these services performed domestically. Through Birla
Horizons International, a joint venture established in India, the Company is
able to provide offshore development, legacy systems maintenance and
conversion services, which can be ported to client computers at satellite speed.
Quality control and project management remains localized through one of the
Company's domestic offices.
(8) Knowledge Transfer: The Company's Education Division offers
custom-designed and/or existing courseware to enhance the competencies of
client staff in specific technologies, languages, methodologies and applications.
The prevailing focus of the Company is to assist clients, through instructor-led
offerings, on-site counseling and various self-paced courses geared toward IT
departments of Fortune 500 companies. The Company's offerings include
mainframe, client/server and open systems, relational databases, object
orientation, application downsizing, information engineering, SAP,
Internet/Intranet as well as training college graduates or "second career"
candidates to become proficient in technologies necessary to perform within IT
departments.
Personnel
As of December 3l, 1997, the Company had a staff of 3,630, of whom more than
3,100 were computer professionals. The Company devotes significant resources to
recruitment of qualified professionals and provides continuing in-house training and
education, and a career path management development program within the Company.
Competition
The Company competes in the commercial information technology services market
which is highly competitive and served by numerous firms, many of which serve only
their respective local markets. The market includes participants in a variety of market
segments, including systems consulting and integration firms, professional services
companies, application software firms, temporary employment agencies, the
professional service groups of computer equipment companies such as
Hewlett-Packard Company, Unisys Corporation and Digital Equipment Corporation,
facilities management and management information systems ("MIS") outsourcing
companies, certain "Big Six" accounting firms, and general management consulting
firms. The Company's competitors also include companies such as Andersen
Consulting, Technology Solutions Corporation, Cambridge Technology Partners, Inc.,
Cap Gemini America, Business System Group, the consulting division of Computer
Sciences Corporation, Analysts International Corp., CIBER, Inc., Computer Task
Group Inc., and Keane Inc.
Many participants in the information technology consulting and software solutions
market have significantly greater financial, technical and marketing resources and
generate greater revenues than the Company. The Company believes that the principal
competitive factors in the commercial information technology services industry include
responsiveness to client needs, speed of application software development, quality of
service, price, project management capability and technical expertise. Pricing has its
greatest importance as a competitive factor in the area of professional service staffing.
The Company believes that its ability to compete also depends in part on a number of
competitive factors outside its control, including the ability of its competitors to hire,
retain and motivate skilled technical and management personnel, the ownership by
competitors of software used by potential clients, the price at which others offer
comparable services and the extent of its competitors' responsiveness to customer
needs.
In summary it is a stock that the market took up to high and has now sold off way too
low. CHRZ has been misjudged as a company that is only a Y2K solution provider
when it has a number of separate and distinct revenue generators.
-------------------
A strong Buy. We should see it blow through the 200 dma and move to the mid 30's in
the next 12 months. |
