<<What makes you so enthusiastic about a stock that may generate stable, but slim profits, pays no dividends, is no longer considered a growth stock and is an unlikely takeover candidate? >>
first, let me say that i have been buying this starting at 7 right down to its recent low, so i obviously feel ifmx will improve. my reasons (right or wrong) are as follows.
1. ifmx has good technology. that still doesn't seem to be too much in dispute.
2. i personally don't believe the database market is as "mature" as some say. imho it will grow 25%+ for years to come. the world still has plenty of info not in databases, the internet is definitely creating demand for dbs, and there is no technology in site that is going to obsolete the need for databases.
3. i believe ifmx is in the 'turnaround' phase, and is past the half-way mark in this turnaround. management, and employee turnover are always part of this. the winners (ie silicon valley millionaires) will be the ifmx folks that stay and get tons of cheap options.
4. i believe ifmx will approach $billion in revenue by the end of yr 2000. this is <30% cagr from current revenue levels.
5. i believe ifmx will get their net profit margin up over 13%. this yields about 77 cents a share 2 years from now. with a 25 pe, the stock would be over $19.00
lastly, i consider the above a 'middle of the road' scenario. market conditions and ifmx mgt performance could cause this stock to fall short or surpass the $19.00 mark. however, at this price level, there appears far greater reward potential than risk. of course this is all viewed from the very special set of glasses that i where when i evaluate stocks ;-).
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