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Gold/Mining/Energy : MGI Software (MGI on the TSE)

MGI 10.99

0.0%

Jun 1 5:00 PM EST

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To: Luc N. who wrote (304)	12/3/1998 5:30:00 PM
From: Steve Stinson	Read Replies (1) of 553

I'm encouraged by the comments from their IR guy. The difficulty in assessing the attractiveness of this stock is predicting when they will actually start to make money. It looked like they were going to cross the threshold earlier this year when the stock went to $5. Then they hit the product upgrade hiccup, and losses widened. In addition, the Discreet fiasco distracted management from properly managing the company. Not surprisingly, the stock price fell. For the time being, at least, they seem to be going in the right direction. Losses have narrowed and the release of the new product upgrades should kickstart sales. R&D expenses may drop a little, while new revenue growth should bolster gross margins. I am cautiously optimistic that they will be making money perhaps as soon as the next quarter. I don't know whether any of the few analysts that are covering the company would concur. Still, I think the downside risk is limited for the moment, with the potential for surprises on the upside. As I said before, I've added to my position. Still, it is one of the riskier investments in my portfolio. Steve

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