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Technology Stocks : edusoft (EDUSF)

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To: Frank Gasker who wrote (66)8/31/1997 7:50:00 PM
From: Frank Gasker   of 272
 
With the Vocaltec (VOCLF)deal with Deutshe Telecom It appears there may infact be a trend of Isreali tech stocks to seek gobalization using equity and marketing agreements.
Several of the Isreali software companies have shown improvement recently. Add Aladin Knowledge (ALDNF) to the list.

Software as a group has improved to an industry rating of "B" (IBD),up from a january "D". Small cap software in general has been showing strenght across the board.

EDUSF remains a good value with a trailing PE of 16 and price to book at around 2. This remains below industry averages but EDUSF still remains speculative. As future quarters come in, trailing PEvalues should benefit stock price plus increased confidence may allow higher multiples as well.
Presently, EDUSF has had 4 continuous quarters of good growth. Their product offering has expanded and is now based on Institution and Consumer sales. I'm very pleased with managements efforts in turning EDUSF around. Especially encouraged by the increased success of their Early Development software. The emphasis of late had been on the English Discoveries courseware that addresses the ESL arena. This adds depth to their product line. I see the introduction of English Discoveries JUNIOR as a positive developement. Look for it be be highly successful Asia. There may be a cultural shift toward a bilingual English/ Asian society starting from early age. As globalization continues, the importance of English as the universal language becomes more significant. Look for others to enter the market, making the equity agreement with a large cap partner even more appealing.

gfrank


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