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Technology Stocks : Brock International (NASDAQ: BROC, the forgotten stock)
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To: Craig Richards who wrote (844)11/5/1997 10:07:00 PM
From: Roger A. Babb  Read Replies (1) of 928
 
Craig, I will find out the details of the settlement and post it after the Friday meeting. Here goes at a comparison with Citrix:

1. Citrix counted the one time MSFT money as revenue. BROC counted the one time settlement as an offset to G&A expenses. Both have effect of increasing earnings, but the BROC method does not inflate revenues or show artificial revenue growth.

2. Citrix is reaping the benefits of a successful product development while BROC is just at the threshold of introducing a new product.

3. Citrix is using remote thin client technology for general purpose remote computing. BROC is using remote thin client technology for an SFA application, the client machines need only a web browser and a LAN or modem or Internet link to server machine. Both approaches greatly reduce the cost of maintaining the system (TCO).

4. Citrix revenues are about 10 times more than BROC but Citrix has a 100 times higher market cap, ie Citrix PSR is ten times BROC PSR. Given the Citrix PSR, BROC would be at over $40 per share. (About $50 if given Siebel PSR)

5. Citrix has been profitable for several quarters and profits are growing if you include the MSFT revenue. This is the first profitable quarter for BROC, but measuring by the reduction in loss is growing faster than Citrix.

6. Both companies have no debt and have cash in the bank. Citrix cash is just under 10% of market cap. BROC cash is over 20% of market cap. Both companies are looking to use some of their cash for acquisitions and new products.

7. Citrix is highly valued, must achieve great things just to keep its current price. BROC is under valued, will go up if it only remains profitable, go up a bunch if it shows growth.

8. Citrix technology is a proven fact, has some warts but it works. BROC NetGain has not yet survived beta test.

9. The main difference is that BROC is potentially at the beginning of huge growth while Citrix is near the crest of its cycle.

There it is for whatever it is worth. I have a large long position in BROC and a short position in Citrix.
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