Here is the latest from Individual Investor's Special Situation report dated 1-13-99:
Romtech is a personal computer software manufacturer targeting individual consumers and small business users. The company's product line includes a variety of computer game titles, including Solitaire, as well as reference and education related software systems.
It seems that the situation at Romtech is about to improve. At the time of this update, Romtech is preparing to formally announce a distribution agreement with Digital River, an electronic commerce technology vendor. In recent conversations with SSR, the company's Chief executive, Gerald Klein, said that Romtech entered the partnership with Digital River in the early December 1998. According to the arrangement, Romtech's software titles will be included in Digital River's database, which is utilized by the company's retail partners, including popular Cyberian Outpost, for direct distribution of software products over the Internet.
The latest development is potentially a strong catalyst, that could lift the stock off of its current valuation level. SSR believes that, through an alliance with Digital River, Romtech can significantly expand its distribution channels, which should ultimately translate into strong top and bottom line growth.
Perhaps even more important factor that could propel shares higher is improving operating performance. Mr. Klein pointed out that in the beginning of the current fiscal year, the company vowed to double its earnings and grow revenue by 50%. According to the CEO, so far, through the second quarter, Romtech is on target to deliver on its promise.
Before upgrading the stock, however, SSR would like to wait until the announcement of second quarter results which should improve earnings visibility for the rest of the fiscal year.
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I will post the next update when received.
Greg J. |
