I listened to the entire conference call. Very bullish. Halfway through the call I added to my position and picked up shares at 15 1/8, which I was surprised to be able to buy so cheap. Highlites:
1. More analysts and Money managers asked questions that I anticipated. This is good. There will be more strong buyers coming to this stock.
2. Management has portrayed conservative estimates for 1999. They're
going with numbers they used back in November of $.85 to $.90. One Money Manager commented that the PROG estimate for 1999 was conservative. PROG management said yes, "those estimates are conservative."
3. Hardware sales and other new facets of their business, which are significant, are NOT factored into PROG management estimates. Hardware alone should provide a 10% upside. Platinum is using PROG to launch a new product -- new sales opportunities like this are not factored into the upside. PROG management clearly likes to be able to beat estimates. Other new products coming out or just now out from Microsoft, Oracle, SUN, IBM, etc., etc.
4. DSO's will drop significantly by the end of Q1, now that the big reseller quarter is over.
5. Sales will grow in 1999 at least at the same rate as prior year, if not more, in 1999. Operating margins will be improved.
6. Company will be more aggressive in 1999 at promoting itself. Backed off on promotions last 2 quarters because of disappointing Q2.
PROG believes it takes 2 quarters to regain respect after a disappointing quarter. That's behind them now. Now, they feel they can restart more active promotions.
Kelly's 2 cents: STRONG BUY. PROG will trade above $30.00 a share in 1999. |
