Correction - CSOC should read SCOC.
Can't find anything wrong in investing in this company which is in the right space (Server-centric computing to enable enterprise for web applications) at the right time and doing the right things. Showed consecutive sequential growth in revenue and income, beating estimates consistently 5 Q's in a role, a strong balance sheet and sound management, great ratios including a mere 2X of price/sales (way undervalued compared to peer). Specialized in UNIX platform and active in Linux. Only problem is lack of coverage - none for a $223 million company! I call this opportunity.
Excerpts from recent earnings reports:
sco.com
SANTA CRUZ, CA (October 26, 1999) - SCO (NASDAQ: SCOC) today announced record results for the fourth quarter and fiscal year ended September 30, 1999.
For the fourth fiscal quarter of 1999, revenues reached a quarterly record of $58,120,000, a 20% increase over the 48,622,000 reported in the fourth fiscal quarter of 1998. Net profit for the quarter was $5,375,000, or $0.16 per basic share, and $0.14 per diluted share, a 100% increase over the net profit of $2,679,000, or $0.08 per share, basic and diluted, recorded in the same period of 1998.
Revenues for the fiscal year ended September 30, 1999, grew 30% to $223,624,000, compared with $171,900,000 for the same period in fiscal 1998. Net profit for 1999 was $16,858,000, or $0.49 per basic share, and $0.46 per diluted share, compared with a net loss of $14,665,000, or $0.41 per share, basic and diluted, for fiscal 1998. Revenues for the fiscal year ended September 30, 1998, include a reserve of $16,000,000 taken in the third fiscal quarter. "We had another strong quarter and a fantastic year overall," said Doug Michels, president and CEO of SCO. "We achieved a string of record financial results and introduced innovative products and technologies to new, high-growth markets, significantly expanding the near-and long-term opportunities for SCO.
"The exponential growth of the Internet and the need to access data anytime from anywhere has given the industry an insatiable appetite for server-centric computing. That's why we've experienced such great demand and growth for our server products, OpenServer and UnixWare 7, as well as our Tarantella web-enabling software. Looking ahead, we expect to gain new business opportunities through our Project Monterey initiative with IBM and our activity in the rapidly growing Open Source market. This is an exciting time for SCO and the industry."
If anyone has a contrary opinion on this, please advise. I bought some at 11 7/16, looking to add if it breaks out.
Rich |
