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Strategies & Market Trends : Three Amigos Stock Thread
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To: James Strauss who wrote (6765)7/11/1998 6:31:00 PM
From: Cary C  Read Replies (1) of 29382
 
THDO....

>>Why the analyst has not moved from a hold to a buy is anyone's guess... When a company is going to do more Revenue in a Qtr than it did in a year it sound's like a buy to me... : >

Jim I believe part of the problem may be interpretation. In the companies release I believe they are saying they are going to do more "software" sales in the June quarter than all of last year. This still is very good but when you compare software sales to total sells the picture is not quite as clear.

>>In fiscal years 1997 and 1998, the Company derived the majority of its revenue from technology licensing fees and the publishing and distribution of internally and externally developed software titles.<<

29.3 million was from royalties and licensing which they will no longer receive. 9.4 million was from software sales. Of these two, there were no costs of goods attributed with the royalties and licensing side and 3.9 million cost of goods on the software side.

The company also expects higher marketing and research costs associated with the change to software only.

Even though sells for the June quarter will be higher than 9.4 million, I believe there are unanswered questions as to the profitability of the company.

Cary
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