Hi Chris,
Thanks for asking me to do an analysis, I'm honored!
1. I looked at the TGIS stock graph and noticed the climb to a high of about $20 around the first of June, then a dive to its current price around $7, with a P/E about 7. I could find no bad news anywhere about the company which accounted for the dive, so it would appear the dive was produced by the people I term "Momentum Investors" moving out of the stock.
2. I then looked up their last quarterly report available on the internet which was posted 13 August. This was their second one posted on the net. I like the fact that companies like TGIS post their reports because I feel it indicates they are not afraid of showing the world their financial situation. Scrutinizing the report, I noted favorably that their net income was up (without doing anything screwy with the numbers), and total liabilites down significantly. They spent a great deal on software development costs which I like to see. My only concern with this report is that it appears that as of 30 June, 24% of TGIS's revenues came from one client.
3. For recent news, I see that as of August 12, TGIS acquired BERMAC Communications. There wasn't much to find on BERMAC except it is building TGIS a web site, which seems to be taking a long time.
On August 30, an Idaho company, AMI, did a nice article on the great work TGIS did for them.
On October 8, TGIS reported that it did not expect to meet estimates for the period ending September, although earnings would be well above 1995 earnings, and meet TGIS' desired 20% annual growth rate.
4. Conclusion. My analysis is that it is a SOLID company, and as you say -- at $7 with a P/E of 7 -- undervalued at this time. It would seem, however, that if TGIS is not meeting estimates, no matter how good it is performing (like ORCL), it is not going to get investors with cash laying around excited.
I think it possibly also hurts TGIS that they don't have a good web site yet, and are possibly not savvy enough to get more business articles published. I would bet TGIS is probably doing some really great things...but they are not getting the news out to get potential investors interested.
5. Have a great New Year! Denise |
