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Technology Stocks : Apertus Tech (APTS)
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To: D. Braun who wrote (128)7/26/1997 1:13:00 PM
From: Brian Fuller   of 164
 
I found the explanation of the sale to be acceptable. They said that they jetisoned it because it was a market segment that they did not think they could be competitive in. As I recall the MQseries was a network management product and if this is true it doesn't fit well with their other product lines. Candle corp, to whom they sold it will be able to integrate into a similar product line.
One investor made the comment that the company has always done a good job of identifying market opportunities but wondered if the leaner /meaner APTS would have the horsepower to exploit these opportunities (they have eliminated i think 70 headcount to get down to 290). Gordon pretty much danced around this question. This is where I have a problem with the company; I think their focus on fiscal responsibility is at odds with the explosive growth of the markets they are going after. As a simple example; Gordon pointed out that the Data mining tools market which they were in would be a 1.5 billion market by yr 2000. If you take their expectation of sales for the current year and give 100 growth for the next two years you end up with a number that is about 1.5 percent of the market. I don't think a 1.5 percent player will be around in the year 2000.
To sum up I don't believe they have the resources, either in people or R&D, to compete in these markets. I was also looking for a faster ramp up in sales (30 million this year does not appear to be bold enough). On the other hand WS seems to like the fiscal tightening and thinks the company is worth something more than current levels.
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