To all:
I listened to the conference call this morning, the first time I've ever done so live as opposed to a playback. I didn't ask any questions, in fact, only a few of the 25 or so in the call did so.
the conference seemed very upbeat and encouraging, with Mr. Chitty (the CEO) emphasising many times that going into the third quarter the pipeline is very encouraging. they're seeing good repeat business; they have experienced good licenses to services (consulting and training) ratio; the UK operation continues strong; they've signed two new distributors, one, as already announced in Korea, and another to be released shortly in South Africa.
most encouraging is the increasing presense in web products in 2Q sales. this seems to be a real area of tremendous potential growth for the company going forward from here.
the West Coast sales team is just getting ramped up, producing, I think he said, about seven or so deals in 2Q. Mr. Chitty and the VP Sales seem very encouraged here now that the California Sales team has "broken the ice." it takes awhile for IQ salespeople to become fully productive due to the sophistication of the products.
they named some impressive customers such as AT&T and the satellite consortium headed up by Motorola. they seem strong in the communications sector.
all in all, i was very encouraged. Mr. Chitty mentioned that historically 2Q is their weak quarter. although the stock has risen some in the last few weeks, I just do not see any reason to sell off now if they missed estimates by a penny. for one thing, as I noted in my last post, the stock does not appear overvalued based not only on current estimates, but even on reduced ones of 10-20% should that be the case (and no one in the conference mentioned or alluded to estimates that I heard--so I am not indicating that I think estimates will, in fact, be reduced). second, I believe that we are right on the threshsold of strong growth, commencing 3Q. their web based technology is sophisticated, and their is a high barrier to entry by competitors (Mr. Chitty indicated so). they mentioned their high win/loss rate for gaining contracts over competitors.
at these levels, I do not find IQSW highly speculative. indeed,I feel as though it is conservatively priced here relative to its potential for strong growth in web products in the years to come.
finally, no one asked about a potential takeover (I was tempted to). I do belive that this remains a distinct possibilty--maybe as high as $20.00.
on the lighter side, I must confess that I was somewhat amused at the contrast of accents between the CEO and his VP Sales; the former having a Southern accent, while the latter sounded Scottish. both these men, as well as the controller, Mr. Elmer, whom I have spoken with before, and seems very responsive to stockholder's questions and concern, impress me greatly as very intelligent and astute individuals who care about the investors who have entrusted their capital to IQSW.
best regards.
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