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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: adad69 who wrote (73424)	11/26/1999 10:27:00 AM
From: kendall harmon	Respond to of 120523

IIJI mentioned earlier, zoom, breaks out to new days highs

To: adad69 who wrote (73424)	11/26/1999 10:42:00 AM
From: Jenna	Read Replies (3) \| Respond to of 120523

POSI I just got a 5 page report from H&Q which is the reason I have a large account with them (beside getting in on every IPO in a very small portion but still worthwhile) ADR's..its a waste of potential not to like ADR.'s.. I'm not sure if you mentioned POSI to me first but I was told about it weeks ago and it looked fine then as well. Without ADR's I'd never have bought 25% of my stocks and they are probably the fastest moving, you just have to be cognizant that they usually have low volume and are not daytrader fare. POSI* reported essentially in-line 3Q99 sales and earnings of $6.5 M and $0.14/sh versus our $6.6 M and $0.14/sh estimate. · Sales grew 49.1% from the previous year and 16.1% sequentially; while EPS grew 27.3% and 7.7% sequentially. · Gross margins declined to 75% this third quarter from 80% in the prior year due to the acquisition of Tamar Industries and its hardware component of sales in the third quarter. · We anticipate POSI's new web enabled Application Service Provider (ASP) initiative to be introduced by the end of the year, focused on smaller chains. · Maintain Buy rating with good Q4 visibility. Estimates Remain Unchanged; Reiterate BUY Our sales and earnings estimates remain essentially unchanged at $25 million and $0.55/sh.(accounting for a lower share count) for F99, and $35 million and $0.71/sh. for F00 respectively. In view of POSI's strong September quarter with new pilot customers, further roll-outs, greater revenue visibility and increasing strength from all geographic markets, we believe that our projections continue to be conservative. We are looking forward to additional news on POSI's new Internet initiative including its impact on the business model, which is expected to be announced in the middle of the December quarter. We reiterate our BUY recommendation and continue to believe that Point of Sale remains undervalued as a software company, selling at only 20X our 1999 EPS estimate and 15X our 2000 outlook, despite its strong revenue and earnings growth, increasingly positive cash flow, and history of conservative financial management. Tamar Acquisition Also during the quarter, POSI acquired Tamar Industries, an Israeli provider of point of sale and back office solutions for independent supermarkets and small chains for $1.75M cash. We believe that POSI's acquisition of Tamar will allow POSI to leverage Tamar's complementary base of small chains and independent supermarket customers in Israel and Europe. Tamar owns a 52% controlling share in CTD-Net, a company that links supermarkets and other retailers to their suppliers via the Internet, a potentially valuable feature which POSI may eventually integrate into its current product and use as a base for its future Internet strategy. In the U.S., Albertson's announced its plans to install POS software in its 1000 stores while pilots have now been installed in 23 of its stores, up from from 10 in the June quarter. Additionally, POSI has continued to generate momentum through its ICL partner in the U.S. supermarket industry, with 23 out of 95 Bashas' Inc. supermarkets installed with POS software. In Europe, Tesco (POSI's largest customer and also the UK's largest supermarket chain), has entered into a JV with Esso to install POSI's post-to-host systems at jointly owned c-stores where Tesco will operate the food franchise and Esso the gas station with rollout expected to initiate in early F2000. The selection of POSI's software to operate the JV represents a significant endorsement by two major companies in the worldwide grocery and fuel businesses. Tesco has also completed its installation of 17,000 lanes in London, and is now progressing to the rest of Europe to complete the remainder of 21,000 lanes under contract. Additionally, Tesco is considering adopting POSI's software solution for new self scanning applications. *reprinted courtesy of Hambrecht & Quist Technology Report