For those thinking of selling in here, keep in mind that it is extremely likely that Nicole Schmidt (Oppenheimer) will up her earnings forecasts on New D for the rest of the year, and her price target will have to go with it. After all, New D just beat her Q1 estimate by 30%. Also, if you listened to the conference call, it is reasonable to assume that at least one more analyst recommendation will be coming out soon. A guy from Lehmann said that "they are working on it" when discussing the prospect of additional analyst coverage. Take it for what it is worth.
The management hit a screaming home run in the conference call. In the call, they mentioned that IBM will be putting out a promotional CD in July to 20,000 of its customers. In one particular software area, New D is the ONLY company that will be highlighted on the CD, as they were the only company to make the grade. That is impressive. Plus the company talked about the fact that they are having larger and larger sales, as customers get more and more confidence in New D's products. They stated that it is becoming apparent that Enlighten did not work the Tandem line very aggressively, as New D is seeing good sales coming from the acquired customers, and that these customers are even inquiring about other New D products. The conference call went on and on with items such as this, so the future at New D seems brighter than ever.
This stock will be a lot higher down the road. If you look back over time,they always have a summer rally. My guess is that the $27 level will be taken out soon, and that should open the door for a move to $30 and beyond. Plus, the more they cozy up to IBM (they have recently become one of the first partners in some new IBM alliance initiative), the more reasonable is the scenario of purchase of the company down the road by IBM. Personally, if it were to happen, I want it to be later rather than sooner, as I think the company can run a great deal higher on its own merit. |
