news: strong buy recommendation
Stockreporter.de Announces Investment Opinion on Futurelink Distribution
Business Wire - June 14, 1999 17:17
GERMANY--(BUSINESS WIRE)--June 14, 1999--
Stockreporter.de begins coverage of Futurelink with a Strong Buy Recommendation and a target of 18$ per share
Futurelink Distribution (OTC BB:FLNKD) Monday received a new strong buy recommendation from the respected Stockreporter.de, a leading European financial Internet publication. The Stockreporter.de specializes in the coverage of micro caps and undervalued OTC:BB companies. The Stockreporter.de is the first analyst to begin coverage of Futurelink and to release an investment opinion since Futurelink has secured itself a revenue boost for 1999 of over 60% by acquiring Microvisions, a fact that has clearly increased the share value as the Stockreporter.de analyzed. The Stockreporter.de began coverage with a target price of 18$ at a current price of 7$ per share.
The recommendation of Futurelink was done on an unsolicited basis and the Stockreporter.de received no compensation for the recommendation. The full text of the recommendation of the Stockreporter.de and additional information (e.g. a brand new interview with CEO Cameron Chell, a corporate profile and further information) can be accessed (beginning on June 16, 1999) at the Stockreporter.de web site at www.stockreporter.de which is going to be the No. 1 micro caps and OTC:BB site in Europe and especially in Germany where Futurelink is listed at the major Berlin Stock Exchange. The site is completely available in both languages, German and English.
The report includes the following information:
"For several weeks there has been a great deal of discussion about the extremely strong development of ASP technology. Probably one of the most interesting investments in this sector is the Futurelink Distributions share (FLNKD), which has come to the notice of many investors especially after the recent major acquisition. The listing on the NASDAQ, planned for the fall of 1999, is giving the share price new drive. In our opinion this share is a 'strong buy' and has enormous potential from the next few months way into the year 2000, especially because with a current price per share of less than 8$ Futurelink is extremely undervalued. We consider the following points especially to be key factors of success for Futurelink:
-- The fact alone that Futurelink is one of the most innovative market leaders in the field of ASP technology, a terrific new approach of the whole corporate (inter-)network sector, speaks for itself. Futurelink's strong position as one of the founder members of the "ASP Industry Consortium" (http://www.aspindustry.org/) in cooperation with the Blue Chips of the market (e.g. Microsoft, Compaq, Cisco, Sun Microsystems) underlines the company's good positioning within the ASP industry, which should be able to achieve the biggest growth rate in the whole Internet sector over the next few years.
-- 'This news is dynamite!' can be seen on the homepages of Microvisions (www.microvisions.com) and Futurelink (www.futurelink.net). The meaning of the acquisition of Microvisions,the 'No. 1 Citrix reseller and integrator in North America,' has been suitably paraphrased by Futurelink and Microvisions. Because with only a little more than 20% new shares and a cash payment, Futurelink has secured itself a revenue boost for 1999 of 60%, a fact that has clearly increased the share value. Futurelink itself reckons with about $12 million turnover in 1999, while Microvisions forecasts $20 million for 1999. With this takeover the new company is therefore no longer making a turnover of $12 million, but all at once $32 million in 1999. Even more important is the effect of the takeover on future growth, since Futurelink is with immediate effect no longer present only at 3 locations, but at 10 important locations in North America. As well as giving them seven new locations, Microvisions is also making a contribution to them of over 1,500 new customers - an extremely valuable potential for intensive cross-selling of ASP products and hence continued expansion! Turnover estimates for 2000 of about $50 million as well as around $150 million for 2001 may shortly have to be drastically corrected upwards by Futurelink. We assume that in 2000 alone a turnover of at least $75 million will be possible (a strong increase over the old estimate), without the inclusion of any other current acquisitions.
-- The management team at Futurelink is first class. Cameron Chell as CEO, a man who founded and has led Futurelink from the start, recognized the chances for ASP technology very early on and is considered the pioneer of the branch. He wasn't voted President by the 'ASP Industry Consortium' for nothing. But also his negotiation skills with investors and competitors gave Futurelink new investments in the past and finally the successful acquisition of Microvisions as well. CFO Raghu Kilambi has also served the company very well; it is largely because of him that Futurelink's finances have been successfully reorganized over the past few weeks; he carried out the necessities of the reverse split, organized the financing of the Microvisions acquisition and is now striving to let Futurelink fulfill the sophisticated criteria for the NASDAQ listing. New on board, and of very great importance is the new Executive Chairman Philip R. Ladouceur, previously Executive Chairman of MetroNet. While at MetroNet he showed his outstanding ability of how to make an enterprise grow and thus MetroNet increased its value under Ladouceur from $15 million to $3 billion in only 3 years. In the meantime, a lot of people consider Futurelink capable of achieving similar dimensions, with Ladouceur an extremely valuable reinforcement. Last but not least the new President of Futurelink, Glen Holmes, formerly CEO of Microvisions, will make sure there's rapid growth in the most diverse regions of the USA, for after all he turned Microvisions in only a few years all over the USA into the No. 1 Citrix reseller and integrator in North America, a fantastic achievement.
-- The planned seminars for June and the following months with interested new customers, which are being organized in cooperation with Citrix, Cisco, Compaq and others, should very soon lead to announcements of new, big contract conclusions. Moreover, Futurelink has at present several other interesting agreements in the pipeline, so that good news is to be expected from here in the next few weeks and short-term share price potential can also be seen.
-- The reverse split, which was a prerequisite for the NASDAQ listing, was responsible for bringing a lot of new and above all large investors to invest in the Futurelink share. The NASDAQ listing in the fall will also attract numerous large investors (e.g. funds) who are not allowed to invest in OTC:BB shares. We see a very unique opportunity here of getting in on this rising share at a currently low market capitalization of approximately $300 million (only 7 - 8$ per share, which under NASDAQ standards should be clearly over a billion $ (e.g. compared with the competitor USIX)).
Even if we take a very conservative revenue estimate of $75 million for the year 2000 and a revenue multiple of only 10 - 12, we consider a market capitalization of $750 - $900 million even under conservative standpoints to be absolutely fair. Hence for the next 6 months we fix our price target per share (with about 43 million shares after the financing of the acquisition) at a minimum of $18. In comparison: the previous analyst's price target lay (reverse split adjusted) at $15, so that with an increase in the share price target of merely 20% after the acquisition and the other top news, our estimate is really rather conservative. CEO Cameron Chell and his first class team should still be good for a few more successful surprises so that we could even expect much higher share prices than 18$ in 2000."
CONTACT: Stockreporter.de, Germany
Torsten Prochnod, 011 49 172 403 1383 |
