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Technology Stocks : edusoft (EDUSF)

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To: John Hayman who wrote (26)5/31/1997 9:49:00 PM
From: Frank Gasker   of 272
 
john,

In spite of the recent gains Edusoft has enjoyed, IMHO there are several factors which I feel allows continued upper movement.
both near and longer term

generalizations
Small and micro cap companys appear to be coming around.
Foreign ( Isreal included) markets are attracting investors
Worldwide demand for English learning tools are improving and presently increasing. The market is in no way saturated.
English is the Universal Language
Quoting Steve Niederman Edusoft manager " English is the language of Business Worldwide and Worldwide Business is improving."
There appears to be a focus on Education in US by present administration. ( heard numerous inquiries to Edustar about their "Early Development " software. )
Software as an industry group has been trailing the market and IBD had group rating of "E". This rating has improved to "D" this week.

specific to Edusof
Edusf is still only about 1.2 times book value and 2x sales
Trailing PE of 16.6 well below industry group average for Software companys of about 34
Momentum is with Edusoft
Continued open optimism by management
Horrible Q2 96 will enhance comparisions for next quarter (this is what set off edust after q1 results)
The Tel Aviv Globe had an article that indicated Degem ( private and parent to Edusoft holding 66 % outstanding.) was enjoying a growing market for "Telecommunication Training Services" The interdependence of Edusoft and Degem is a relationship which I find confusing. Not necessarily bad but because Degem is private, info is unobtainable. My opinion "As Degem goes so goes Edusoft"
Present condition of Low float with improved demand reverses from disadvantage to advantage
Chart patern is bullish with nice volume improvements. Chart confirms turnaround.

Edusf may pull back somewhat if the general market eases or the Isreali Palestinian situation gets violent. I would view this as an oppurtunity to buy, however if monmentum excellerates to extremism I will not hesitate to take some profits. imho it's not near there yet. Extremely optimistic, maybe overly. Check this one before entering

gfrank
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