Salma
UBS Securities -- Jeffrey Schlesinger (jeffrey.schlesinger@ubs.com)has released a revised Equity Research Report on MDSI. He has mover a Buy to Strong Buy. In his investment conclusions Jeffrey says and I quote:
"We believe MDSI represents one of the most attractive ways to participate in the Customer Interaction Software sector as deregulation in utility and telecommunications markets drive the need for improved customer service and solutions for improved dispatch/workforce management. Good visibility (C$33 million in backlog including C$19 million in software), a dominant market position, excellent management, and relatively underpenetrated markets, creates an exciting investment opportunity. We believe that as SSI (general field service) and SMS (land mobile transport) begins to contribute to operating profits in the current quarter and ramp into the second half of the year, the stage will be set for an explosive earnings story. Despite the company's performance, shares of MDSI remain relatively inexpensive, trading at only 14.7 times this year's EPS estimate of US$0.80. In addition, the company's current valuation reflects a mere 2.1 times estimated 1998 software/services revenues of US$50 million. We expect that as the company continues to ramp its business over the next several quarters, particularly the software component, the stock should trade up to the low $30s, reflecting 30 times our 1998 EPS estimate. Accordingly, we reiterate our Strong Buy rating, and strongly recommend investors accumulate shares of what we believe looks to be a very exciting story going forward."
That (I suggest) is what is driving this stock up. The question to be answered is "What is keeping this stock down?" :+)
Peter Bradshaw
|
