MSGI overview from Raging Bull:
ragingbull.altavista.com
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MSGI's recognized competitors in sector / Overview:
HHS, OMC, ACXM, FIC
All trade at between 2.1x and 3.4x revenues. MSGI isn't making money, yet, but is trading at about 1/5 this year's revenues. Hard to argue that MSGI is now overvalued. The easier argument is that it is vastly undervalued.
Buddy - the 10-K, like last Qtr's results, are not pleasant. I'll give you that. They could've and should've done much better. MSGI spent two years chasing rabbits. (Look at ENGA, CMGI, YHOO, DCLK, EPHY, IIXL, PCLN, etc.) But, now all the bad news is out for all to see. The damage is done. Now it's time to regroup. MSGI's future is, admittedly, uncertain. MSGI does have many positives, however, "looking forward" -as compared to your obsessant fixation on the "past."
What are they:
MSGI....
1. has highly recurring revenues of $225 - $240 million;
2. has a client base of some 5000, with no single client representing more than 5% of revenues;
3. is focusing solely on its core marketing business;
4. has no more Internet business/focus; no more cash drain;
5. is now cash-flow positive and will very likely be earnings positive beginning 2nd Qtr. FY2001, which qtr. began Oct. 1; (this is MSGI's largest [X-mas] Qtr. of the year)
6. is trading at about 0.23x FY2001 revenues (sector averages is well above 2x revenues);
7. currently trades at less than 1/3 book value;
8. has $10 million cash and still has yet to liquidate WiredEmpire and sell Pegasus (will probably net another $3 - $4 million);
9. received a "clean opinion" with no ongoing concerns by independent accountant in 10-K filed Oct. 13, 2000;
10. industry/sector still projected to see explosive growth, direct & Internet marketing industry, $205 billion by end of 2001 ($153 billion in 1997)
11. its CEO, JB, picked up 200,000 shares for $1.3 million ($6.5 per share - perhaps he's just an idiot) - but there has been no insider selling, at least.
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