AXXel's Internet Letters-Enterprise Software
August 12, 2000
[Prices as of 8.11.00]
AXXel's INTERNET& E-Commerce Letters
This Report: Enterprise Software
[ASWX, AGIL, ASDV, BAANF, BMCS, CNTR, CA, EPIC, GPSI, ITWO, IFMX, INPR, JDEC, JDAS, MANH, MANU, MSFT, NOVL, ORCL, PSFT, SAP, SYBS]
Using, AXXel Knutson's
VTAR™
["Volume Trade Analysis Research"™]
"Manage the risk…the profits will take care of themselves"
"In this business, being right is not as important as making money…consistently, and one of primary tenets of the quest is the avoidance of the 'obvious risk'"
Securities provided through
First Allied Securities, Inc.
Member NASD & SIPC
197 Mountainview Road - Warren - NJ - 07059
Email: axxel@blast.net or tradingweapon@aol.com
Telephone: 908.647.5750 FAX: 708.585.6185
First Allied is registered in all states. Mr. Knutson is registered in all states
TradingWeapon™ VTAR™ [Volume Trade Analysis Research™] TradingWeapon & TradingEngine is Trade and service marked by and owned by Axxel Knutson.
© 1999-2000 all rights reserved, Axxel Knutson
"TradingWeapon.com" is the business name for AXXel Knutson, who is a Registered Principal of an independently owned office of Supervisory Jurisdiction [OSJ] with First Allied Securities, Inc. TradingWeapon.com offers all of its securities business through First Allied Securities, Inc., a member of the NASD/SIPC. Bear Stearns Securities Corp. is the clearing agent for First Allied. Securities. Inc.
From our recent letter about the Internet Stocks:
"So, this will be the new format -
We are going to publish a new series of letters on the Internet rather than publish one massive letter covering the whole group. We are segmenting the letters relative to the kind of business venture in which the company is involved. For example, Apple will be under PC's and that will be under "Equipment" and that will be under "Infrastructure." The format for the grouping is the same as found in our Internet Report dated 8.1.00. [If you did not get this report -if you are on the email list, you DID get it-& want a copy of that report, you may email us for a copy].
From this point forward, we will take just one section of the total group and that will be available on Multex [pay per report], available free for our clients, of course, and some reports available for free or nominal charge on various websites. Many, but not all by any means, will be available to our Email list." We will not cover the privately held companies. Institutions must have an established business relationship with www.TradingWeapon.com for updates and direct contact. Institutions wishing VTAR™ products may email their interest.
INFRASTRUCTURE, Sub-Group-Content Ennablement/Enterprise Software
· Enterprise/General Software
1. Active Software, Inc. [ASWX]
2. Agile Software Corp. [AGIL]
3. Baan Company NV [BAANF]
4. BMC Software [BMCS]
5. Centura Software Corp. [CNTR]
6. Computer Associates Int'l, Inc. [CA]
7. Epicor Software Corp. [EPIC]
8. Great Plains Software [GPSI]
9. i2 Technologies, Inc. [ITWO]
10. Informix Corp. [IFMX]
11. Inprise Corp [BORL]
12. J.D. Edwards & Co. [JDEC]
13. JDA Software Group, Inc. [JDAS]
14. Manhattan Associates [MANH]
15. Manugistics Group, Inc. [MANU]
16. Microsoft Corp. [MSFT]
17. Novell, Inc. [NOVL]
18. Oracle Corp. [ORCL]
19. PeopleSoft [PSFT]
20. SAP Aktiengesellschaft [SAP]
Sybase, Inc. [SYBS]
ACTIVE SOFTWARE INC (NASD:ASWX- $51.25) 5 year or minimum history range: $12.50 - 149.13 Shares O/S: 25.808 M. Market cap: $1390.406 M. ASWX Provides eBuisness infrastructure software that provides customers with a platform to automate end-to-end business processes inside their enterprise, with business-to-business trading partners and with customers over the Internet. No long-term debt, just over break-even for the quarter ending 6.30.00 and growing revenue stream. Company takes incompatible software apps and allows the intercourse of that data over various platforms. We can see the fundamental need in most enterprises. We rate this stock negative and take no stand at this point. On our "watch list" however.
AGILE SOFTWARE (NASD: AGIL56.13). 5 year or minimum history range: $ 17.13 - 112.50. Shares O/S [M] = 46.475 M. Market Cap: $2,746 M.
The company develops and markets product content management software, which is software that enables companies to collaborate over the Internet. Strong rev growth but equally strong increases in losses. The stock is has the potential to move to the top of the trading range and that is about the $85 level. If that develops, we will re-evaluate. We rate the stock negative at the moment entry points are south of $50.
BAAN CO NV (NASD: BAANF-2.56) 5 year or minimum history range: $ 1.13 - 16.25. Shares O/S: 242.4 M, Market Cap $605.9M. A global provider of enterprise business solutions. It offers a comprehensive portfolio of enterprise software applications. Takeover by Invensys PLC [U.IVS]. Will be dropped from coverage.
BMC SOFTWARE (NASD: BMCS-$18.50). 5 year or minimum history range: 16.13 - 86.63. Shares O/S: 246.545 M. Market cap: $4792.2 M. Provider of systems solutions for both mainframe and distributed information systems. Dismissal of class action suits is not exactly the kind of news this company needs. We don't see much more negative price action but we will rate only neutral positive. Our VTAR™ numbers are beginning to improve…but not enuf 4 us to jump.
CENTURA SOFTWARE CORP (NASD: CNTR-$3.25) 5 year or minimum history range: $ 0.56 - 18.88. Shares O/S: 39.085 M. Market cap: $125.8 M. CNTR provides a suite of information appliance and e-business software solutions. Last quarter flat revenue and increased losses. With most of the bad news out of the way the stock can come to life. We will rate as positive. Embryonic and subject to change-so stay tuned.
COMPUTER ASSOC INTL INC (NYSE:CA-$24.88 5 year or minimum history range: $ 23.69 - 79.44
Shares O/S: 590.970 M. Market cap:
$ 16030.048 M. Designs, develops, markets, licenses and supports a wide range of software products focused on enterprise management, information management and business applications; designed to function on a variety of hardware platforms and operating systems. There is a new CEO, Sanjay Kumar with Wang kicked upstairs where he can't do any more damage. CA needs to rebuild with the investment community. Company has been unfocused and this new CEO may do the trick…but maybe not. Short-term we just prefer to let them stew without our involvement. Avoid.
EPICOR SOFTWARE CORP (NASD:EPIC-$3.13). 5 year or minimum history range: $2.31 - 12.00. Shares O/S: 41.486 M. Market Cap: $134.831 M. Company designs, develops, markets and supports an integrated suite of client/server enterprise resource planning (\'ERP\') applications targeted for use by mid-market companies and divisions/subsidiaries of large corporations worldwide. Increasing losses and decreasing revenues. The recent strength $2.60 to $4.60 demonstrated some life and that move is consolidated…but we suspect that there is not that much in it although a successful test of the $4.60 number is likely. We can do better. Avoid.
GREAT PLAINS SOFTWARE (NASD: GPSI-$26.88). 5 year or minimum history range:: 16.00 - 83.50. Shares O/S: 17.392 M. Market cap:
$415.239 M. Provides fully integrated front office/back office business management software solutions for the mid-market. These include financial, distribution, enterprise reporting, manufacturing, electronic business, human resources and payroll and customer service; mainly accounting and other back-office software. The company could be a point of positive rotation in terms of revenues but not earnings just yet. We will rate the stock as positive given the extent of the crash from the $75+ area and the potential for translating revenue to the bottom line. The buy point is sub $25 and possibly sub-$20 although that is not too likely given the recent strength and the intermediate-term destruction of the spring of 2000.
I2 TECHNOLOGIES (NASD:ITWO-$146.94). 5 year or minimum history range: $ 15.13 - 223.50. Shares O/S: 195.57 M. Market cap: $27550 M. Dallas, TX HQ. ITWO is a provider of intelligent eBusiness solutions that help enterprises optimize business processes both internally and among trading partners. TradeMatrix, its Internet marketplace, is an open digital community powered by i2's optimization and execution capabilities. Revenues up 72% to $428.9M with loss of $269.1M vs. income of $2.4M. Net loss suffered from $209.9 M amortization of intangible charges. Short-term the stock is acting well but the valuation is still excessive. Plenty of reward but plenty of risk…it doesn't match just here, but give us a break of the $128 number and we will go to a buy recommendation from our current "accumulate." You can give it the benefit of the doubt.
Chart is courtesy of R.W. Mansfield & Co.
INFORMIX CORP (NASD:IFMX $4.55) 5 year or minimum history range: $ 4.00 - 21.25. Shares O/S: 280.4M. Market cap $1297 M. A supplier of information management software and solutions to governments and enterprises worldwide. Company designs, develops, manufactures, markets and supports the software and solutions. Revenues slightly ahead and losses off 78%-an improvement to be sure caused by absence of $97M litigation settlement charges. The price destruction is pretty much complete and there is relative price stability…but we need some catalyst and we don't have it. Hold only.
INPRISE CORP (NASD:INPR-$5.25) 5 year or minimum history range: $ 3.44 - 20.00. Shares O/S: 61.2M, Market cap: $327M. Develops and provides integrated, scalable and secure cross-platform software solutions that provide ease of use, performance and
productivity. Recent release of its "Jbuilder 3.5. Revenues ahead 11% most recent 6/30-quarter revenues off to $418K because of absence of license fee from MSFT in the comparable quarter. The stock is now below its intermediate term base [as are a lot of NASDAQ stocks] and recent numbers are suggesting that INPR is rated "positive."
J.D. EDWARDS & CO (NASD: JDEC-$21.88). 5 year or minimum history range: $ 10.25 - 48.31. Shares O/S 109.3 M. Market cap: $2288M. Denver. Develops, markets and supports highly functional Enterprise Resource Planning (ERP) software solutions. Application suites support manufacturing, finance, distribution/logistics and human resources operations for multi-site and multinational organizations. 6 months revenues up 2% as of 4/30/00 with a lower loss due to special items [sale of BuildNet and gain on sales of equity investments. IPO 9/97 @ $23 by MSDW. The stock moved up $6 ½ just a few days ago when the company announced that it might post an operating profit for its 3rd quarter. The move is excessive and with the base at the $12-16 level, we would expect a retracement closer to that number at which time we would rate the stock as "accumulate." For the moment we are rating the stock as "hold."
JDA SOFTWARE GROUP INC (NASD: JDAS - $15.50). 5 year or minimum history range: $ 8.50 - 29.63. Shares O/S: 25.4M, Market cap 378.2 M. A provider of comprehensive enterprise software solutions that address the mission-critical business information requirements of retailing organizations. Revenues for the 2nd quarter 6/30/00 to $46M vs. $37.1M and net income $0.15/share vs. $0.03 fully diluted. Although not likely to be a dramatic mover, we will rate the stock as "gently accumulate." You can figure that out, right? I thought so.
MANHATTAN ASSOCIATES INC (NASD: MANH-$ 46.00). 5 year or minimum history range: $ 3.50 - 48.63. Shares O/S: 24.7M, Market cap: $ 1091 M. A provider of technology-based solutions to improve supply chain effectiveness and efficiencies. Company\'s
solutions enhance distribution efficiencies through the integration of supply chain constituents, transportation providers and
consumers. Recent quarter showing good numbers and good income…like profits. With software fees up 84% -revenue of $34.6 M, up 75% from 1999 and net income of $4.5M. The stock has already exceeded its March high and considering that the stock was just lifting then, we think that this stock has more in it; perhaps much more. Buy.
MANUGISTICS GROUP INC (NASD: MANU - $62.00). 5 year or minimum history range: $ 9.06 - 70.25. Shares O/S: 28.5 M. Market cap: 1597 M. No debt. A global provider of intelligent supply chain planning & optimization solutions which include client assessment, products, consulting services for implementation and solution support, for enterprises and evolving e-business trading networks. The stock has totally recovered from the NASDAQ crash with a dramatic and un-telegraphed reversal and appears headed higher. We like the revenue stream and rate the stock as a buy.
MICROSOFT CORP (NASD: MSFT - $72.44). 5 year or minimum history range: $ 60.38 - 119.94. Shares O/S 5262M, Market cap 390075.8M.
We continue to rate the stock a "sell" as we have since Christmas, 1999. Short term there is a series of higher highs and the market could take the stock higher in the short term to the high 80's. We will not buy for such a move.
NOVELL INC (NASD: NOVL - $ 9.19) 5 year or minimum history range: $ 7.81 - 44.56. Shares O/S: 324.547 M. Market cap: $2964M. A leading provider of network and Internet directory software and services. The company\'s solutions make networks more manageable and secure and integrate complete ranges of computer platforms, applications, services and devices. Novell in process of turnaround and with over $1 billion in cash, we think they have the assets to make it happen. Disappointments along the way to be sure, but the opportunity for ultimate success exists. Accumulate.
ORACLE CORPORATION (NASD:ORCL - 81.13). 5 year or minimum history range: $ 17.34 - 90.00. Shares O/S: 2838M, Market cap: $ 235588. Oracle develops, manufactures, markets and distributes computer software that helps corporations manage and grow their businesses. Software products are categorized into two categories; systems software and business applications software. Revenues and net income totally on stream and the stock ignores the softness in NASDAQ. With the consolidation of the $25-80 move nearly complete; we would suggest that the stock is capable of another leg toward triple digits. Nevertheless, we would prefer that new positions be taken closer to the lower end of the trading range and that suggests the 70's not the 80's. We rate the stock a "buy." Our preference in the group? SAP [62].
PEOPLESOFT INC (NASD: PSFT - $24.81). 5 year or minimum history range: $ 12-27.75. Shares O/S 292M, Market cap $ 7281M. PSFT designs, develops, markets and supports a family of enterprise client/server and internet based application software products for use throughout large and medium sized organizations with a concentration on the management of human resource operations. The 2nd quarter saw the company swing to profitability with net income of $16M or six cents/share on a revenue growth of 17%. Software licensing was up 37% and this prior to a launch of their new product PeopleSoft 8. Although the stock has been strong, lifting off the destruction of early 2000, we feel that PSFT is the leader in the field and rate the stock a buy at current levels and a strong buy upon any break of $20.
Chart is courtesy of R.W. Mansfield & Co.
SAP AG ADS (NYSE:SAP-$ 62.00). 5 year or minimum history range: $ 31.69 - 85.94. Shares O/S 732M, Market cap: $41450M. German headquartered SAP is an international developer and supplier integrated business software designed to provide cost-effective comprehensive solutions for businesses. It designs, develops, markets and supports client/server and mainframe standard business application software. Major Fortune 500 customers with large systems. Revenues continue to climb but poor attention to the bottom line caused by the expansion damaged the stock's recent performance. We think the stock hit a minor stumble and rate the stock a strong buy at current levels.
Chart is courtesy of R.W. Mansfield & Co.
SYBASE INC (NASD: SYBS - $26.63) 5 year or minimum history range: $ 10.19 - 31.00. Shares O/S: 89.2M, Market cap $2397M. SYBS provides businesses the ability to manage and deliver information wherever the help is needed across distributed mixed computing environments, including the Internet. Revenues up about 10% for the 6 months ending 6/00 and net off a little. Still the stock has thrown off the market correction and we rate the stock a buy here and expect the potential of a successful test of the highs. Accumulate.
DISCLAIMER
Investment decisions should not be based solely on our proprietary indicators, which are intended as an adjunct to your additional analysis. Please accept these comments as market commentary. We do not intend these comments to replace detailed fundamental analysis. We urge you to accomplish that additional research via your contacts on the Internet or through a trusted financial advisor. If you want additional information on any of the securities discussed within, we will give it upon your request.
This report has been prepared from original sources and company data we believe to be reliable, but we make no representation as to its accuracy or completeness. This report is published solely for information purposes. It is not to be construed either as an offer to buy or sell or the solicitation of an offer to buy or sell any security or the provision of or an offer to provide investment services in any state where such an offer, solicitation or provision would be illegal. Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice and we may not update that change to you. The opinions expressed are that of AXXel Knutson and are not necessarily representative of First Allied. First Allied Securities, Inc., its affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold, or sell a position in the securities mentioned herein.
The author of this report, Axxel Knutson, does not invest in any of the securities mentioned in this report nor does his immediate family unless such securities are included in mutual funds or index options. Equity investment involves risk of capital loss. We recommend that your portfolio be diversified by company size, industry group, and geographic region and by currency.
It should not be assumed that future selections will be profitable or will equal the performance of past selections. Securities listed herein illustrate selections made using proprietary indicators known as VTAR™ [Volume Trade Analysis Research™]. These names, VTAR™, Tradingweapon, www.TradingWeapon.com TradingEngine™, www.tradingengine.com ™, Volume Trade Analysis Research™, are servicemarks/trademarks of AXXel Knutson.
All recommendations and commentary are directed toward sophisticated, aggressive traders who have significant experience trading in a volatile market and who possess the financial resources to risk a loss of some or all of their invested funds. Commissions and, if you use margin, interest charges will lessen any return on investment. VTAR [Volume Trade Analysis Research] centers around the proprietary analysis of trading volume, price, general fundamental analysis, beta concerns, group rotation and detailed analysis of risk as it relates to entry and exit points in highly liquid stocks.
Axxel Knutson, President
axxel@blast.net
www.TradingWeapon.com a premium investor service
VTAR [Volume Trade Analysis Research] ™
197 Mountainview Road, Warren, NJ 07059-8038
Telephone: 908-647-5750; FAX 708-585-6185
A registered Principal of and securities offered through
First Allied Securities, Inc. Member
NASD/SIPC"
AXXel's show, VTAR™ "Buy, Sell, Hold or Jump Off a Bridge" is heard on wwww.radiowallstreet.com live at 2PM every Thursday-just go there and you can hear it live. Radio Wall Street also hosts a Message Board for questions about stocks, "Buy, Sell, Hold or Jump off a Bridge." AOL's "MarkeTalk" hosted by Sage is at every Tuesday, also at 2PM and here you can ask specific questions on line and AXXel will attempt an answer to your stock and investment questions. You must be an AOL subscriber.
Bloomberg: Help, "Axxel" - then # 7, then # 2 for recommendations transmitted to Bloomberg. Not all recommendations are transmitted to Bloomberg. Market Commentaries on the BBC "World Service," Bloomberg Radio and Television, www.multex.com, www.marketdigestonline.com, www.ibchannel.com, www.vcall.com, www.radiowallstreet.com, www.stockseekers.com,www.bibtipper.com, www.pinkbulll.com, www.TradingWeapon.com, Additional web sites: www.siliconinvesor.com and others.
Email: axxel@blast.net or tradingweapon@aol.com
If you want me to handle your account…
In response to inquiries relative to opening securities accounts handled directly by AXXel Knutson, here is the deal: Accounts are handled directly by Knutson with First Allied Securities, Inc. TradingWeapon.com offers all of its securities business through First Allied Securities, Inc., a member of the NASD/SIPC. Bear Stearns Securities Corp. is the clearing agent for First Allied. There are no additional investment management fees and there is no sharing of profits or losses. Client-selected stocks may not enter the account unless approved by AXXel and this is not a likely occurrence. AXXel hates your stocks. The minimum account accepted is $100,000. Sob stories are listened to for amounts under $100k but rarely accepted unless AXXel is in the mood. These accounts tend to be trading accounts so don't even ask if you can't stand the activity and at times total inactivity and cash. AXXel does not personally trade in the same stocks as clients or those written about in his newsletters or spoken about in media appearances although First Allied Securities, its brokers and its officers may take and have positions although they receive no advance notice of new recommendations or changes in opinion. The opinions expressed within are those of AXXel Knutson and may not be shared by First Allied Securities, Inc. Those interested in additional information on any stocks discussed within may call at 908-647-5750 or email AXXel at axxel@blast.net. We do not deal in BB stocks [with the exception of some ADR's]. Refreshing, isn't it?
AXXel Knutson's VTAR™ Research at www.TradingWeapon.com. You may email AXXel at axxel@blast.net or you may not; it's up to you after all.
Charts courtesy of R.W. Mansfield & Co., MANSFIELD STOCK CHARTS
2973 KENNEDY BLVD. JERSEY CITY, NJ 07306. Phone: 201-795-0629, Toll free: 1877-MANSFLD
(626-7353) 9am-5pm (Eastern) Monday through Friday Fax: 201-795-5476
E-mail: rwmansfield@yahoo.com Web: mansfield-charts.com.
Research can also be found soon at WWW.Multex.com on a pay-per-report basis. |
