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Strategies & Market Trends : Investing for the January Effect 2000
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To: CatLady who wrote (35)12/24/1999 10:59:00 PM
From: Q.  Read Replies (2) of 109
 
Catlady, I'm perplexed by PROG. How can a software company have a gross margin of only 11%?

For most software companies, the 'cost of goods sold' is really tiny. A few pennies to shrinkwrap a CD. That's the wonder of the software business. But not PROG. It operates on a razor-thin margin, and consequently it has a PSR of only 0.1, which is also extremely unusual for software.

As far as a possible January effect stock, well maybe so. The stock is small, it is depressed, and ownership appears to be concentrated primarily in small hands. Just the same, I don't understand the company. There must be something that I don't know to explain that margin.
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