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Technology Stocks : CKSW: ClickSoftware Technolog.
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To: uu who wrote (60)2/10/2008 8:59:18 PM
From: gcrispin  Read Replies (1) of 66
 
Addi,

Fugi's post brings up many strong points about the company. In discussing the the revenue to enterprise value, he is alluding to the strong cash position. What he could have added is the fact that the cash position has grown from 13.8 at the end of 2005 to 24.7 at the end of 2007. Also, not mentioned is the fact that the company holds a 40 percent share of the market. Moshe would argue that their market share could increase due to recent improvements to the mobile side of their workforce management.

The problem I have with the recent earnings release was not on the revenue side. Tom pointed out the weakening license revenue in the fourth quarter, but on a year over year basis the revenue mix between services and licenses actually strengthened in favor of licenses. What Fugi doesn't address is the increase in operating expenses. Net operating income is even more of a question mark if you take into account that the company doubled its interest income in 2007 compared to the previous year. Personally, I was not satisfied with Moshe's explanation of the increase in operating costs. If my memory serves me correctly, he shrugged if off as something that happens and you can't really control a point or two increase.

Additionally valuations have become compressed for the entire tech sector. When you have CSCO and ORCL selling at fifteen times 08 earnings, it looks like CKSW is fairly valued at its current price.

In the past the company tends to surprise then disappoint when it comes to earnings. A long term chart certainly shows the roller coaster ride investors have travelled with the company's fortunes and misfortunes. Regardless, I am still holding on with half of my original position.
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