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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion

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To: Don S.Boller who wrote (9311)2/3/1998 7:56:00 PM
From: paul e thomas  Read Replies (2) of 13949
 
IMRS VS CHRZ

My comments about IMRS vs CHRZ relate to the question of their strategic plan in light of shareholder value. IMRS plans to grow long term mostly through internal growth by using their low cost IT professionals to leverage profit growth. IMRS has a gross profit margin of 46.8% versus 34.1 % for CHRZ. They also have a tax rate of 34.5% versus 42.0% for Chrz. Thus to produce the same after tax profit contibution CHRZ must grow revenue 55.8% faster than IMRS to produce the same earnings growth rate. CHRZ hopes that with their 100 MM$ cash position they can make aquisitions that would materially add to their revenue base and strategic position in the market place. These aquisitions will not come cheap as many of the cash rich Y2K firms have similar ideas.
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