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Dow Jones Newswires -- November 26, 1998
Hummingbird 'Oversold' On 'Dampened' Earnings View:
Analyst
By Lori McLeod
TORONTO (Dow Jones)--Hummingbird Communications Ltd.'s (HUMCF) share price is up because the
stock was oversold after the company "dampened" its earnings expectations for fiscal 1999, Paul Bradley,
an analyst with Canaccord Capital Corp., told Dow Jones.
In Toronto, Hummingbird's shares are up 2.40, or 8.8%, at 29.60, on volume of about 92,000 shares.
In October, Hummingbird told analysts it was expecting net income of about $1.70 a diluted share in fiscal
1999. At the time, the First Call mean earnings estimate for Hummingbird for fiscal 1999 was $2.42 a
diluted share. The day of the announcement, Hummingbird's share price dropped about 15%.
Given "the pile of cash" that Hummingbird has, the stock was oversold on the news, analyst Bradley said.
Bradley said the company has indicated it will use the cash to make an acquisition on the
business-intelligence-software side of its business.
However, Inder Duggal, Hummingbird's chief financial officer, said the company has no announcements
planned. He said the company's shares are "undervalued" and the stock price rise is likely due to the
company "catching up" with the rest of the technology market.
Bradley said the company has had a "flurry" of new-product releases, and has been working hard to
market its business-intelligence software, which is considered to be its growth engine.
However, Bradley said he's waiting to see how much revenue Hummingbird brings in from its
business-intelligence products in the next six to 12 months. He's maintaining a "hold" recommendation on
the stock until then, Bradley added.
Bradley said he has a 12-month target price of C$31.00 for Hummingbird.
-By Lori McLeod; 416-943-7800 |
