Max re:EDGR, got this write up this morning. May your RED turn GREEN...
EXTRA! EXTRA! (Today's Feature Headlines)
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EDGAR ONLINE: Good things aren't always exciting
By J.J. Philips
Want to come up with a brilliant, exciting idea that is sure to make you wealthy? The most exciting ideas don't always generate the big bucks in the stock market. Take Edgar Online - that's EDGAR: E for electronic; D for data; G for gathering; A for analysis; and R for retrieval - an idea that may be brilliant and profitable, but not terribly exciting.
EDGAR is the U.S. Securities Exchange Commission's (SEC) database, which gives open access to SEC information contained in public company filings. The SEC requires all public companies to make their filings electronically through the EDGAR system. Edgar Online, an independent, publicly listed company, takes the available information, presents it in a cohesive and user friendly format, and makes it available on the Internet.
Edgar Online (Nasdaq: EDGR) went public in May, at an initial offering
price of US$9.50. The stock has since traded as high as US$21.88 and as low as US$6.06, and closed today is at $11.93. With a market cap of roughly US$140 million, you'd think the company was printing money. Not so - not yet, anyway. The company's most recent financial results for three months ended March 31st, 1999 showed revenues up 67% to US$641,000, and a net loss of $586,000. Currently, the price/sales ratio is in the 54-times range. [Based on: $11.93 (share price) x 11.5 million (outstanding shares) divided by annualized revenue of $2,560,000 (quarterly revenue x 4).]
However, the analysts who have initiated coverage on Edgar Online seem to think the company can make some money, and there are a couple of strong buy recommendations on the street.
Edgar Online offers several services, and since going public is adding a new service each month. Some of Edgar Online's information and services are free, and some are fee-based. To quote the company's initial public offering prospectus, Edgar Online aims "…to meet the increasing market demand for real-time, value-added business, financial and competitive information by providing our users with sophisticated methods of mining data contained in EDGAR filings."
In addition to Edgar Online's primary service, the company has Edgar Online Investor Relations, which reformats a company's SEC filings into a comprehensive and coherent "co-branded" web page. Another service is Edgar Online People, which allows the user to, among other things, search SEC information for the name of an executive. A sister service, Edgar Online Personal, allows users to search for information along a number of lines, such as geography, industry or product.
And, primarily to capture the interest of the up-and-comers in the corporate world, Edgar Online has recently established a University Edition, which gives business and law schools access to SEC information.
In case you are wondering, Edgar Online does have competition. The business is intensely cutthroat, offers low margins and caters to customers who like to receive services for free. Edgar Online's revenues come from three main sources: monthly fees from individual subscribers to the Web site; fees from corporations for subscriptions, information and Web site cooperation; and advertising revenues from online advertising. Edgar Online devoted a significant amount of space in its prospectus to outlining the competitive pressures and risk factors. Nevertheless, the company is on to a good thing, and may be an attractive investment. If you're thinking of investing, keep this in mind: the company has 11.5 million shares outstanding, but the market float is only 3.6 million shares, as the majority of Edgar Online is closely held. Liquidity may be an issue.
What do we think of Edgar Online? We went right to the source, and looked up the company's SEC filings on the Edgar Online Web site. It was fast, efficient, and user friendly!
For information related to this story, you may wish to use the following hyperlinks:
edgar-online.com
nationalpost.com
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