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Pastimes : Crazy Fools Chasing Stocks w/5-letter Symbols Ending in F
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To: ms.smartest.person who wrote (212)1/30/2001 2:19:57 AM
From: ms.smartest.person  Read Replies (1) of 307
 
[INVGF] Innovation worth looking at

THE Innovation Group surprised the market this summer when the insurance software group successfully floated raising £45.8m, while the rest of the technology sector was slumping.

It is a testament to the company's success that even in the tumultous five months since it has floated, the shares still trade well above their debut price of 263.25p. After rising to £12.66.5, the shares have slid back, but yesterday they added 7.5 to close at 767.5p after Innovation beat analysts forecasts with sales of £9.5m.

Its software is useful to any large insurance company, allowing it to cut the cost of processing claims. Indeed, it has already signed up several high-profile clients, including CGNU, RSA, and Zurich Insurance. Company officials say they are in talks with majority of the 20 biggest insurance companies in the US, and expect to sign deals in the first quarter of 2001. However, the shares still trade at over 150 times next years forecast earnings of 5.46p a share. In today's investment climate investors are bound to ask how can this be justified?

Simply put, The Innovation Group's software is almost certainly the best of its kind in the market. According to consultants PwC the software is about two years ahead of the closest rival - margins of over 30pc reflect this. The house analysts predict the market for the software to worth billions of dollars. Indeed there is a strong argument that every insurance company should buy it. Worth a look.

telegraph.co.uk
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