Hey Vantiveheads time to get this thread going again!
Been doing more primary research recently.
I get the sense things are going well this quarter - the company is clearly maturing in spreading big deals over many quarters. In addition to Robbie Stephens, management is traveling to see investors over the next several weeks.
I sense market share gains in core CIS business and continuing wins against Mr. Siebel. Plenty of room in CIS, but they expect to be going head to head against Tommy much more in the future. (This is somewhat of an issue because although the investment community views Siebel as arrogant, they view his company as more aggressive and likely to beat vntv head to head.) I think CIS is more complex than folks realize and VNTV's partnering strategy and product suite approach will counterbalance the sebl aggressiveness)
(I think the stock price the belongs here for now, but it won't be here for much longer.)
Here's my view of vantive stock price over the last few years:
ú When the company was blowing the cover off the ball - June 96 $0.23 in eps versus estimates of $0.08 - stock was a classic momentum stock - way way ahead of itself in valuation I think peaked around 42 _ in late 1996.
ú Company stated intention to manage results down and keep operating margins in the 16% to 18% range, but sell side analysts get caught in the game of "I've got the high estimate on the street"
ú Company starts meeting expectations - momentum deflates out of stock, stock compresses and sees a low of 14 « in April 1997.
ú Company keeps meeting expectations stock tries to reach old highs and comes close hitting 38 in July 1997, but competition blows up in 3Q, investors nervous stock touches low 20's in September through the mini crash in october.
ú Stock starts to be undervalued based on opportunity, but increased competition with sebl starts to worry folks -- good results offset by nervousness stock still stagnant
ú Company puts up another good quarter (December 1997), distancing from competition, but puts up numbers on same day sebl blows cover off the ball, lemming investors view companies as in same business and ignore the number two guy (Yes, Steve farber I know they're in different businesses.) Also confusion surrounding whether the company beat the number by $0.02 (they did) or actually made estimates due to confusion over new reporting standards for share count and impact of convertible.
ú A few large investors lose patience and starts selling into huge nasdaq rally. Several million shares in recent dumped in three weeks. (Hey, that's like a $100 million secondary offering.)
ú Investor psychology still negative, lots of long term holders frustrated with the stock going no where, but finally we have some tech investors looking to put their money to work. I think robbie conference, institutional travel and march 10th investors day will start a new round of folks looking at the story. If the market doesn't correct, I bet we've seen the low for the year. A fair price target is 30 to 35x 1999 estimates which I guess will be in the $1.15 to $1.30 range.)
I think now's the time to add or begin positions. Any thoughts? |
