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Technology Stocks : TouchStone S/W (TSSW)

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To: Daniel Schumacher who wrote (2563)4/1/1999 6:12:00 PM
From: David Alan Cook  Read Replies (1) of 3627
 
Danny,
Well stated. In small companies like TSSW, I first look at the fundamentals. . . Price to Book, Price to Sales and Price to Cash Flow. I prefer companies that trade at a discount to the Industry Valuations. Next, I look at the companies balance sheet to see if the company will have enough time to turn its operations around. Specifically, I look at the cash on hand and debt.
TSSW sells at a steep discount to the Industry valuation . . .has no debt to equity or Long Term Debt. Shareholders were discouraged ( including myself ) that the mgt team could not take the necessary steps to enhance shareholder value. They had great products
(Product of the year . . Winlist . . etc ) but were unable to market them effectively.

The new CEO has demonstrated his ability to turn a small company into a profitable and growing one. He also has a great incentive to turn TSSW around:
1) Will own 25% of all shares
2) Will receive 3% of all revenues over 6 million this year ( Read 8K recently filed ) Bet we see 100% revenue this year and a profit.

I would recommend that others call the company and do their DD. I did. I am looking for a profit in the second qtr and beyond.

DC
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