From the "Inside Wall Street" column in Business Week:
Juicing Up Caminus
By Gene Marcial
Hilary Kramer, investment strategist and senior managing director at multibillion-dollar Cisneros Group, is ever on the prowl for undervalued growth stocks that she deems are potential buyout bait. Her latest pick: Caminus (CAMZ), an energy play with takeover spice added.
In recent days, the stock has jumped from 25 to more than 31--on record third-quarter results and rumors that a couple of large enterprise-software companies are eyeing Caminus--a provider of software and consulting services to electric and gas utilities and energy traders in North America and Europe. Among its customers: American Electric Power, Conoco, ConEdison and PG&E Energy Trading.
Who is after Caminus? "It appears that PeopleSoft and Germany's SAP are looking to expand into energy," says Kramer. She notes that both are enterprise resource planning companies that develop broad applications software. PeopleSoft, whose market cap is $12.3 billion, develops enterprise software for finance, human resources, and supply-chain planning. SAP, with a market cap of $51 billion, is the world's largest maker of collaborative e-business software solutions.
"Caminus would give SAP of PeopleSoft entry into a slice of the energy market that's growing annually at 30% to 40%," says Kramer. SAP and PeopleSoft already make financial software systems that they could apply to yet another rich market, she says. "PeopleSoft is always on the lookout for possible acquisitions," says spokesman Steve Swasey. SAP didn't return a phone call. Caminus CEO David Stoner declined comment.
James LoGerfo of Banc of America Securities rates Caminus a "strong buy," with a 12-to-18 month price target of 45 based on its "robust earnings growth and solid future prospects." |
