The Wall Street Transcript Publishes Enterprise Software Analyst Interviews
NEW YORK, Nov. 10 /PRNewswire/ -- Five leading analysts and eighteen Enterprise Software CEOs examine the Enterprise Software sector in the latest issue of The Wall Street Transcript (212/952-7433) or twst.com
In a vital review of this sector for investors and industry professionals, this significant 120-page report features:
1) Technical Design Software -- Detailed Analyst Interview (3,400 words), Jay Vleeschhouwer, Vice-President and Senior Industry Analyst with Merrill Lynch investigates mechanical design automation (CAD/CAM), electronic design automation (EDA), design software, valuations, price-revenue metrics, pricing issues, product growth outlook and specific stock downgrades and recommendations.
In the mechanical design segment, and certainly to an extent in the electronic design segment, they are driven by general levels of economic growth, capital spending, product development spending or R&D-related expenditures by the customers, Vleeschhouwer states, "With the problems we've seen in Asia and Japan last year and still this year, each of the companies that I follow has to varying degrees been affected by that, some far worse than others. So certainly we are hopeful that when the Japanese economy recovers, that will translate into renewed momentum in that market for Parametric (Nasdaq: PMTC), Synopsys (Nasdaq: SNPS) and Autodesk (Nasdaq: ADSK). There seems to have been some bottoming, but not yet really much of a recovery."
In the design space, those markets are characterized not by industrial or manufacturing or engineering users or requirements, Vleeschhouwer declares, "It's more professional designers, corporate, business, even consumer applications, and certainly lately we've been seeing a great deal of additional demand in that space for Web-related implementations. Macromedia (Nasdaq: MACR) and Adobe (Nasdaq: ADBE) are finding more and more of their software growth being induced by the need to design and bring up Web sites, which require software tools. So that market is driven by the obvious explosion of growth in the Internet, specifically Web sites and Web-related activities, e-commerce, imaging and visualization on the Web."
2) Systems Management Software - In-depth Analyst Interview (3,900 words), David Breiner, Vice President and Research Analyst with Volpe Brown Whelan & Company examines enterprise infrastructure software, systems management software, security, middleware, Y2K impact, e-business and offers specific stock recommendations as well as investing strategies for the sector
Volatility is very high across my universe, Breiner states, "Currently the sentiment seems to be quite favorable and improving. I think what's dominated the discussion over the past year or so has been the millennium bug, or Y2K. Ironically, it seems the closer we get to year-end, the more comfortable investors are that these companies will still be standing January 1, 2000."
One area in particular that has been very rewarding of late is the storage management market, Breiner declares, "I cover two companies in this area, Legato Systems (Nasdaq: LGTO) and VERITAS Software (Nasdaq: VRTS), and both are phenomenal companies, in my opinion, that have performed very consistently and have grown revenue and earnings at pretty heady rates over a long period."
The security sector is quite a varied and diverse area. Even though we give it one label, "security," it's really a number of submarkets under that umbrella, Breiner asserts, "I have two recommendations in that area. The first is Internet Security Systems or ISS Group (Nasdaq: ISSX). They've carved out a leadership position in a market called intrusion detection, which is basically like alarm systems for your enterprise and Internet systems. This is a dynamic market and they're the dominant player."
The other is VeriSign (Nasdaq: VRSN), Breiner states, "Which I view as a core holding in the Internet security infrastructure area. VeriSign provides managed trust services based on public key infrastructure and digital certificates, which are like Internet passports used by businesses and users. VeriSign has a unique and attractive business model, which carries a lot of revenue visibility and is very leverageable."
We have a lot of old software applications and systems and a lot of new stuff coming onstream, Breiner explains, "So there is a huge opportunity and a need to integrate old stuff with new stuff to create a broader, more flexible system out of a bunch of smaller applications. This describes a market called enterprise application integration, or EAI, which is the area of middleware that I'm focused on in particular."
The two leaders that have been out there for a while are New Era of Networks (Nasdaq: NEON), and TSI International (Nasdaq: TSFW), Breiner states, "I'm recommending NEON with a strong buy. The company missed expectations in the June quarter actually in a dramatic way, and investors naturally punished the stock. But I think they've made a lot of progress in terms of rebuilding visibility and rationalizing their cost base and streamlining a strategic relationship they have with IBM."
3) Customer Relationship Management Software -- In-depth Analyst Interview (1,900 words), Sarah Bernstein, Vice President with First Union Securities examines the growth of sector firms fueled by e-commerce, lack of pricing pressure, valuations, investing strategies and shares her list of stocks with strong buy ratings.
Customer Relationship Management software is used within corporations economy-wide to automate front office employees who interact and develop relations with customers, Bernstein explains, "These efforts span sales, marketing, customer service and support functions. With the advent of e-business, there is a rapidly emerging eCRM software market to further enhance corporations' abilities to offer customers online selling, marketing and customer service and support."
Offering specific recommendations, Bernstein declares, "There are three leading vendors in traditional core areas that are significantly shifting over to capture some of the huge growth e-business opportunities. I have Strong Buy ratings on Siebel Systems (Nasdaq: SEBL), MicroStrategy (Nasdaq: MSTR) and Peregrine (Nasdaq: PRGN). Regarding the newer eCRM vendors, I have a Buy rating on BroadVision (Nasdaq: BVSN), and believe the company is beginning to emerge as a possible leader."
This 120-page Enterprise Software Issue also includes:
4) Enterprise Software -- In an in-depth Analyst Roundtable (10,000 words), Robert Austrian, Senior Research Analyst at Bank of America Securities and Melissa Eisenstat, Senior Software Analyst with CIBC World Markets Corporation examine Y2K issues, product simplification, ownership cost, IT spending, overseas markets, market share factors, pricing models, PC demand, consolidation, the outlook for the sector and specific stock recommendations.
5) The TWST confidential Off The Record survey of management performance at 19 Enterprise Software firms asked market insiders about the ability of management teams to create shareholder value. In a sector where many management teams are criticized for failing to execute on their business plans, some CEOs receive top marks for their efforts.
Firms reviewed in Off The Record include:
Adobe, Axent Technologies, Autodesk, Citrix, Computer Associates, Compuware, Legato, Macromedia, Merant, Mercury Interactive, NetIQ, Parametric Technology, RSA Security, Safeguard Scientifics, Segue Software, Sybase, Symantec, Synopsys and Veritas.
6) Eighteen extensive (average 2,500 words) CEO Interviews with top management from the following sector firms discussing their future plans and outlook for their firm and the Enterprise Software sector:
Open Market, ActiveWorlds.com, ALYA International, Ariel Corp., Aspen Technology, BEA Systems, Crosskeys Systems, ExperTelligence, iEntertainment, Integrated Business Systems & Services, IntelliCorp, Interplay Entertainment, Intraware, Merge Technologies, Unigraphics Solutions, Compu-DAWN, PowerCerv and Fourth Shift Corp.
To obtain a copy of this insightful 120-page report, see twst.com or call 212-952-7433. This special section is also included in the TECHNOLOGY Sector of TWST Online at twst.com
The Wall Street Transcript is a premier weekly investment publication interviewing market professionals for serious investors for over 35 years. Available at twst.com TWST Online provides free Interview excerpts. For highlights, recent recommendations by analysts and money managers and Silicon Valley news, visit twst.com
The Wall Street Transcript does not endorse the views of any interviewee nor does it make stock recommendations.
SOURCE The Wall Street Transcript
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