10:58 NWRE Neoware Systems -- Momentum Profile (22.35 +1.25)
Neoware has been showing good momentum lately, having doubled since early Sept, so we thought we'd take a closer look. The co provides software for "thin" appliances. Instead of using a PC, a thin client is simply a minimal workstation, perhaps containing only a screen and a keyboard. Server-based computing provides System Administrators greater ability to manage the desktop and produce better security. Benefits of thin appliances: eliminate local hard drives, floppies, and CDs; are virtually immune from standard PC viruses; eliminate the need to travel from desk to desk to install software; eliminate moving parts; and perhaps most importantly, they typically cost one-fourth the price of a typical business PC.... The co is profitable and growing strongly as Q1 (Sep) revenue was up 63% yr/yr to $26.5 mln. Neoware recently expanded into Asia with its acquisition of Maxspeed... NWRE's balance sheet is solid with $44.1 mln in cash/inv, or $2.68 per share, with no debt. The stock is near an all-time high and has flirted with the low-$20 level in late 2002 and 2003 before selling off 50% each time in the following months. However, a sustained push through this area would be a bullish signal. The stock trades at fairly high p/e of 32x, but when compared to its SepQ rev and EPS growth rates of 63% and 70% (to $0.17 from $0.10), it looks reasonable.... Mkt cap $363 mln, float 16 mln, avg vol 499K. |
