To group: Uncommon value for software company.
I have hesitated posting this at higher levels even though at $6 and $5 I still thought was a great value. AT $4, I felt now it is time.
I have followed this company since last October.
Infinium Software. (INFM).
The Numbers:
Stock price = $4.1875
Cash per share = $3.34
Price/cash = 1.25
Price/sales = .5
Price/book = 1.18
Shares out = 12.6 million.
52 week high = $23.25
52 week low = $4.125
Earings last four quarters
3-98 = $.10
6-98 = $.19
9-98 = $.20 (end of fiscal year)
12-98 = $.08 (this quarter is always weakest)
Average estimate for fiscal year ending 9-99 = $.63
These numbers represent a low valuation rarely seen for a software company.
WHY? The main reason is that INFM is an "enterprise software" company sometimes
called "ERP". Some larger companies in this area are: JDEC, PSFT, SAP, BAANF.
Compare the per share values of these with INFM , and you will like what you see.
Wall street hates this whole sector now because there is a fear
(justified at this point) that this sectors customers are concentrating their software
and Information systems efforts on becoming Y2K compliant, and thus delaying other
software purchases. The good news is unlike some sector or company specific problems
we can all be sure that the Y2K is a temporary problem. Once it is passed, this
should be more positively viewed again. Wall street (in its typical short-sightedness)
sees this stock trending down, and knowing that it is probably "dead money" short term
is abandoning it in favor of whatever is performing now.
Another Knock on INFM is that it was dependant on mid range (AS400) systems.
That is changing. The company has been heavily investing in , and creating new
products for Windows NT.
A little background on the price history. This small cap company along with
most other small caps got hit hard late last summer and fall with the market in general.
Sector fears may have had a role partially then also, and the selling fed on itself
until at exactly the wrong time (10-98) the company reported earnings that missed by $.02
(came in at $.20) which crashed the stock from about $10 to $5. After a small rebound,
it got caught up in tax selling, and slipped back down again. This year, it had a January
effect rally, and after the most recent earnings report (which met estimates) has continued
to slip for the reasons listed above. Which brings us to the value we now see.
I don't have any expectations of getting rich quick here, but with a 12 month view,
I think INFM is a good place to be.
You may have heard of some of the larger ones such as
Yahoo research = biz.yahoo.com
Yahoo profile = biz.yahoo.com
Most recent earnings report = biz.yahoo.com
Company web address = infinium.com
Yahoo message board (recently some very good discussion here)
messages.yahoo.com
SI board does not have much activity.
I have tried to present the + and - here, and I do appreciate
any feedback.
best to all, Eric.
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