Here's a recommendation for PEGAE from INVESTools:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
5. Pegasystems: A Fixable Turnaround (PEGAE)
Wednesday, January 6, 1999
Turnaround expert George Putnam says he's always on the
lookout for good companies that are distressed by problems
that are fixable. "Pegasystems (PEGAE) seems to be just such
an opportunity," he says. Pegasystems is the leading
provider of customer service management software for large,
transaction-intensive business such as banks and credit card
companies.
Like many software companies, Pegasystems recognized its
revenue aggressively -- too aggressively for auditors Ernst
& Young who resigned over the issue. Wall Street punished
the stock by dropping it from the $30s into the high teens.
The revenue recognition problem may be back again, though.
The firm was late in filing its latest quarterly report to
the SEC as it was reviewing revenue recognition in recent
quarters, and soon after it announced Q4 earnings would fall
below expectations. Wall Street mercilessly drove the firm's
stock from above $17 in October to its current level near
$4.
"We think Wall Street has over-reacted to the problems at
Pegasystems," Putnam says. Though he concedes that he isn't
sure how serious the accounting problems are, Putnam cites
the
firm's superior product in a growing market, sound financial
position (no debt and plenty of cash), management with
tremendous incentive to get things back on track, and signs
that the accounting problems are being solved. "We think the
potential rebound in the stock now outweighs the risk of
further unpleasant surprises. Therefore, we recommend that
aggressive investors buy Pegasystems up to 7 1/2," Putnam
says.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
|
