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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Susan G who wrote (63422)	9/27/1999 7:22:00 PM
From: kendall harmon	Read Replies (1) \| Respond to of 120523

AREM looks interesting on this pullback. Look at all that volume whne the stock was at its days low. finance.yahoo.com clearstation.com <<Sep 02, 1999 AremisSoft: Y2K Slowdown? What Y2K Slowdown? by Glenn S. Curtis and Julia Muller 9/2/99 What a difference Y2K concerns can make. Sales and the shares of the once red-hot firms that provide Enterprise Resource Planning (ERP) software have waned as Fortune 500 companies delay spending until next year. From Baan (NASDAQ:BAANF - news) to Peoplesoft (NASDAQ:PSFT - news) to J.D. Edwards, virtually every ERP player has taken a hit. Every player, save for little-known AremisSoft (NASDAQ:AREM - news) that is. "We do not see any slowdown in momentum due to Y2K issues and we remain positive on our business outlook," says AremisSoft's president, Roys Poyiadjis. AremisSoft is a supplier of enterprise application software to the manufacturing (33% of revenue), hospitality (27%), healthcare (31%), and construction markets (9%). "The fact that AremisSoft has several products in several markets and is not dependent upon one product in a vertical market is a definite advantage," adds Poyiadjis. During the second quarter, sales jumped 36% to $16.7 million. Sequential revenue increased 27.7% from $13.1 million in the first quarter of 1999. Net income for the quarter increased 56.8% to $2.5 million, or $0.20 per diluted share, as compared to $1.6 million, or $0.16 per diluted share, for the year-ago quarter. Net income increased 215.4%, sequentially, from $803,000 in the first quarter. Meanwhile, a cash flow loss of roughly $5.5 million in 1996 turned into an operating profit of $10.1 million by year-end 1998. The company's recent sales strength comes from a fortuitous decision to focus on smaller companies that have less than $200 million in sales. These are often newer companies that are less saddled with Y2K concerns. This also limits the amount of competition that the company must face as the bigger ERP players are more inclined to chase bigger accounts. To spur growth, AremisSoft has made 11 acquisitions in the U.S., boosting sales 35% annually in the process. Though it took awhile to successfully assimilate these acquisitions, it appears that things are starting to turn around. Indeed, its 3.5 million shares that were taken public in an IPO back in April at $5 a pop were recently quoted at $9.50. Obviously, two executives who purchased over 200,000 shares in the open market since July at prices ranging from $4.50 to $5.13 per share look smart. Though the shares have nearly doubled since these purchases, they still look cheap. Thanks to the recent IPO, AremisSoft has the dough to invest in growth, both internally and via acquisitions. And customer diversity should smooth out any lumpiness in the quarterly sales ramp. For example, the hospitality division is expected to grow by 35% as the company takes advantage of the growing hotel property management market in the United Kingdom where the company has historically derived roughly 60% of its sales. Growth is expected in the healthcare division in the range of 15% if the company can benefit from an expected upgrade in systems in the U.K. Wall Street is forecasting that the company will earn $0.78 per share for the year ending December 1999 and $0.95 in 2000. Consensus estimates have the company earning $0.21 per share for the third quarter ending September. This means AremisSoft is trading at just 9.3 times its 2000 estimate Bottom Line: AremisSoft represents a unique opportunity for investors who are looking to capitalize on an ERP player that is performing well. We suspect that when the industry rebounds, companies with strong fundamentals and growth prospects will be among the first to rise. AREM fits this bill, and we think that patient shareholders will be rewarded.>.