>Dr. J., My "bullish" attitude on COSFF comes mostly from past >experience with other "high profile"
>companies which have been in Corel's position with respect to >earnings, competition, negative press, low
**For every one you mention, there is another company like it that is either languishing near the bottom or has gone out of business. Your argument is that a beaten-down company may offer great value (obvious), but isn't in itself a bullish sign.
>It also comes from high expectations with Corel's product line, >internal talent...> I do believe that Corel
>management has the ability to learn from errors and make corrections. >We've seen a fair bit of evidence of
this already,
**Now you're talking! What evidence of internal talent do you have? What has management done to learn from errors?
>Personally, as a stock, COSFF excites me due to its market >capitalization to revenue ratio of 1. Compare
> that to MSFT's 11 or 12.
***Low P/S can be good, if the company's PM is in a temporary slump during a product transition (as you clearly believe this one is).
***But MSFT is a bad comparison; they have an exceptional profit margin
> Also, the fact that a high profile, name brand company is almost at >book value...
***Book value is largely irrelevant for software companies, unless most of the equity is in cash
As I am sure you know, great technology and products drive a software company, followed up by good marketing. One misstep can blow the lead however; both WordPerfect and Lotus missed the transition to Windows. Don't look for Corel to win back significant market share from MS Windows users; their only hope is the current DOS users moving to Windows.
As for Java Office, this is still a prototype; Java has huge potential, but having built Java applications myself, I am pretty sure that personal productivity applications are not the fulfillment of that potential.
Anybody else want to tell me what Corel fundamentals make me want to buy this stock (other than "it's so low, it can't go any lower...")? |
