>>Any thoughts on how prevalent takeovers, acquisitions, etc., might become in these market segments over time?<<
I believe that in order to be successful, all companies must strive to capture greater market share. If the more mature companies stand still, or lose ground, then before long another more aggressive firm will eat away at their revenue stream and could eventually take them over. Now I believe that any mature company who is faced with losing out on these lucrative contacts will be forced to either improve their products and business, or get rid of the competition. Look to the Internet market to see how the consolidation within a market is viewed as an essential ingredient for long term success.
Given that ASI already has a respectable list of multi-plant/branch customers, I see them as an attractive take over target based on this contact list alone. Remember that the President of ASI recently gave an interview where he stated that they have an initial contract to install their system in 17 plants within a company that has 160 plants in total! The potential for future revenue from that company alone is staggering.
I would love to know the total number of possible install sites ASI has within their current customer base. I bet that if no further customers were signed this year, the revenue that could be generated from servicing their existing customers would provide a cash flow into the company sufficient enough to drive the stock price higher.
Now, combine this current T&A based revenue together with the revenue that they will start to realize from their new Middleware product and then throw in the value of their leading edge software products etc., and this company will no doubt attract the attention other firms interested in having that revenue added to their own bottom line.
Remember, that ASI has already incurred the higher costs involved with product development. That was last year. This year, they are realizing the profit on those investments. So, in my opinion, for the most part, that drain on profit is behind them. So, yes I agree, that now would be a great time for another interested company to come in and link up, or take over this company.
However, in a perfect world, I would much rather see the share price rise, followed by more investors coming on board. Then any additional money raised could be used to fund a more aggressive growth plan. I would prefer this, as I see the potential for this company over the next few years as unchecked. They have the products, contacts, and infrastructure can take them much higher.
I agree with you, either way ASI has a very exciting and profitable future ahead of it.
Crazy Canuk |
