JDN,
The Y2K “lockdown” scenario has been talked about but as I posted last Thursday, I'm skeptical. Chuck Phillips, Morgan Stanley's ERP analyst, gave his view of the situation in an article on the Dow Jones Newswire earlier this month. According to Phillips, top software industry officials such as Oracle's COO Raymond Lane, BMC Software's CEO Max Watson, and Novell's CFO Dennis Raney say their customers don't plan system “lockdowns” later this year in which no new software is introduced until after Y2K is taken care of. In Phillips' view, ERP companies are having more of a product transition problem than a Y2K problem. Managers no longer want to put in the old generation of client/server systems, but instead want Internet style systems made up of large backroom servers that users can tap into through browsers on their desktop PC's. Phillips cited a recent survey of CIO's at larger corporations that found the executives are afraid of being placed at a disadvantage by the Web. “They can't let a new channel develop and not be there”, according to Phillips.
MAPX is addressing the demand for Internet applications. The Company now has available Release 5 of the MAPICS XA product, which allows companies to maximize the benefits of e-commerce through a complete Java user interface (eWorkPlace) and an Internet-based customer service application (COM Net). Using eWorkPlace, remote or local users can obtain controlled access to MAPICS applications via an intranet, an extranet or the Internet. COM Net helps companies service their customers over the Internet, enabling them to place orders, review inventory availability, obtain current pricing and promotional information, specify product configurations and inquire into the status of an order 24 hours a day, seven days a week.
MAPICS has stated that one of the things it intends to focus future product enhancements and extensions on is e-business applications. This will include full Internet, intranet or extranet enablement to allow the customer to access any part of the MAPICS XA application from any geographic location via an Internet connection.
So I think that as demand for e-commerce products picks up, and after whatever the impact is of Y2K is over, MAPX's long term trend of sales and earnings growth will resume. A triple in MAPX from $5 is certainly possible. The stock was over $20 for extended periods last year. The consensus earnings forecast for next year is around $0.75, and 20 is a very reasonable multiple for this stock in the current market. EPS of .75 with a multiple of 20 would be a stock price of $15.
Byron
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