Thanks for the chance to do a pick for the amigofolio...thankfully you guys have already reviewed and agree!
It's RMDY!
Remedy Corp is the #1 company in the help desk business. They have a 22% market share of this business, (more than 2x the next competitor) but estimates are as high as 67% based on pct. of users served.
The company's stock was trading as high as 48 last November, then tanked to as low as 15 5/8 in January due to lower revenue in Q4 '97. This is regarded by many people as an extreme overreaction. The market for help desk software and management expertise is growing dramatically and RMDY is well positioned to take a large portion
of the growth. The company continues to focus on product improvement and is expanding the size of both their internal sales force and their VAR distribution channel. There's also a large focus on expanding internationally.
Results were reported on 4/20 for Q1 and were in line with expectations.
Stock has been in a trading range for the last couple of months between about 19 and 23 but the company's focused and producing excellent product enhancements while improving and expanding their sales channels.
FINANCIAL AND MARKET RATIOS
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Financial and market ratios are compelling in my opinion (based on quarter ended 12/31/97 which was a bad quarter for the company).
....................RMDY........INDUSTRY
Net profit pct......18.2%..........13.2%
Return on assets....13.7%..........10.6%
Current ratio........5.2........... 2.2
Quick ratio..........3.1............1.3
Rev/Share............4.74...........5.1
EPS..................0.81...........0.62
Book value/share.....5.15...........3.79
12 mo rev growth.....50.2%..........18.5%
12 mo income growth..28.4%..........37.3%
12 mo EPS growth.....26.6%..........51.2%
36 mo rev growth.....72.9%..........23.9%
36 mo income growth..87.0%..........24.8%
36 mo EPS growth.....67.8%...........7.1%
HOOVERS PROFILE
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Remedy knows that a well-managed network is a happy network. The Mountain View, California-based firm's Action Request System and its components help administrators solve users' technical problems and better manage corporate computer networks. Remedy is #1 in the market for this type of software. Its customers -- more than 2,200 in 56 countries -- include AT&T, Northwestern University, PG&E, and Wal-Mart. Clients pay about $6,500 for the initial software license, with volume discounts available. About 60% of Remedy's sales are made by the company's sales force. Chairman Lawrence Garlick owns about 12% of Remedy.
Garlick, a veteran of Xerox and Sun Microsystems, wanted to produce software for the nascent client/server market. While looking for venture capital, he met David Mahler, a Hewlett-Packard veteran who had the same idea. They joined forces to write help-desk applications and brought on Doug Mueller, also from Hewlett-Packard. Remedy was founded in 1990 in a cottage behind Garlick's home.
The company's first version of the Action Request System shipped in 1991 and was immediately hailed because it was a highly adaptable off-the-shelf product that ran on multiple platforms. Product updates followed in 1992 and 1994.
Remedy went public in 1995. It has continued to add features to the Action Request System, including problem anticipation, Windows NT support, system asset management, and Web capabilities.
Remedy has been growing through partnerships. The company entered a strategic alliance with network software maker Baystone in 1996 to integrate products, and in 1997 signed an agreement with IBM for integrated products targeted at Big Blue customers and to expand its distribution. |
