Omtool (OMTL) - Undervalued software play? Message Board

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Technology Stocks : Omtool (OMTL) - Undervalued software play?

OMTL 3.780

0.0%

Jul 14 4:00 PM EDT

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To: stockboy who wrote (7)	6/7/1998 6:24:00 PM
From: StocksUp100	Read Replies (1) of 27

I too noticed OMTL around the same time you did. I was turned on to them by a friend who is a very happy user of their fax server software. (I would have posted here sooner, but I didn't register with SI until now. I've been using Yahoo's message board, but the quality of exchange seems better over here once you look past the occasional spitting match.) Anyway, I got in between 7 1/2 and 8. OMTL was a no-brainer at that price - about 15x next 4 qtr earnings estimates (q2 98-q1 99). Try matching that with another software company growing revenue and earnings +100%/yr! At Friday's 9 5/8 close it's still one of the best kept secrets in the galaxy, but it might dip back into the 8s before returning to the teens. I'm expecting to hold for a quick 2 month rebound to 13+ which I predict it will hit around their next earnings announcement in July. I'll consider holding all or part of their shares longer if the company guidance at that time still sounds bullish and if there are no new major competitors on the horizon, though I would expect to see lots of profit taking right after that announcement. It concerns me that OMTL has so few shares in general circulation making it susceptible to accidental or intentional swings caused by large trades - case in point: steep decline for first 3 weeks of May rumored to be because a Montgomery client wanted out of a large position. IMHO, their client picked an awful time to sell. FYI, Montgomery has a nice recommendation posted at: messages.yahoo.com@m2.yahoo.com It's unclear what the competitive landscape will look like 6-12 months from now, but OMTL seems to have a clear lead in the fax server market which actually seems to be benefiting by (not competing with) the e-mail/messaging market explosion. They have also expanded very quickly (via acquisition) into key verticals (e.g., legal market) and complementary areas like pager software. Further, they are making an aggressive and successful push into Europe. If OMTL can continue their integration with messaging platforms and catch the coat-tails of Microsoft and IBM with all their Exchange and Notes installations, they'll should be able to keep current momentum for the next few years. The biggest downside risk I can see is the possibility of MS buying/developing/bundling a competing product. GO OMTL!!

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