I've done a bit of homework on STGI -- read the thread, checked
out dailystocks.com, etc. There's simply not much info
available on this small firm. They were, until recently, listed on the
OTC Bulletin Board and have just reportedly been promoted to a
NASDAQ Small Caps listing, although I couldn't find STGI on either
the small cap or regular NASDAQ in this week's Barron's.
Their business is disaster preparedness and recovery for mainframe
computer systems, primarily Bull of France (formerly Honeywell).
They are apparently adept at testing entire systems for fixes. This
basic capability is supposed to account for 40% to 50% of the entire
Y2K market. Finding and fixing errant code will ostensibly account
for 20% to 30% of it, and there are scores of companies trying to
carve up that segment. STGI is supposed to be one of the very
few players out there with a full-system test capability, and this
simple fact makes them a potential Y2K moonshot stock in the
opinion of some. Others are troubled by a recently announced
association with ConSyGen (CSGI), a stock that has "the look
and feel of a Y2K scam" according to an infamous and oft repeated
qoute on their SI thread.
STGI's chart is interesting. It formed a very stable base between
$6.00 and $8.00 a share between Oct 96 and 1 May 97, then
quickly ran up to $15.00. It seems to have topped out there, and
daily volume is tapering off (e.g., 39,800 shares traded today) The
52-week high/low is 3 3/4 to 15 5/8. Its break-out last month
coincided with upward momentum in the entire Y2K sector. If there
is any softness in the broad market or the Y2k sector in coming
weeks, the price will probably retrace -- a good buying opportunity.
The stock presents a reasonably unique opportunity to structure
a balanced Y2K portfolio; i.e., a "body shop" or two such as CBSL
or IMRS, some automated-solutions firms like ALYD or PTUS (an
IPO on this one soon), and an experienced tester like STGI.
For those interested in financials, I'll summarize what little I've
found in another post. |
