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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: Connor26 who wrote (80836)	1/27/2000 5:20:00 PM
From: Susan G	Respond to of 120523

Connor, you are right, they are not profitable yet. After reading this briefing.com article, it was my impression that they were and I hadn't done a thorough DD. They are speaking of the sector in general. There has definitely been some money flowing in this week, possibly earnings related? It's a little early for that though. Many times today it was one of only 2 or 3 green stocks on my screen. Real strong, And a nice move at the close. from Briefing.com 12/29/99 Trader's Edge - Xpedior Inc (XPDR) [BRIEFING.COM - Damon Southward] B2B, Linux and CRM stocks have all been fantastic movers over the past month. But going into earnings season, wouldn't it be a novel idea to own companies which actually produce them (earnings that is). One group which can be relied upon to deliver profits is the Internet Professional Services sector. The price action last quarter in this group demonstrated that the market still respects and, more importantly, rewards the ability to operate a business in the black. Xpedior Inc (XPDR 30 3/4) is the latest name to join the space. The company came public December 16 in an initial public offering priced at $19 per share. After opening at $28, the stock traded in an intraday range of $26-31 before closing the session at $26. By most measures the stock has been a laggard; but then so had many of the other names in this group before their impressive quarterly earnings reports brought visibility to their shares. The Chicago, IL-based company was spun-off from information technology solutions provider Metamor Worldwide (MMWW), which now owns an 80% stake in Xpedior. Metamor is planning to distribute all of its remaining shares of Xpedior common stock to its stockholders in the second-half of 2000. As with many players in this space, Xpedior has adopted a growth-through-acquisition strategy. Over the past two years, XPDR has purchased seven smaller companies. But the pace of acqusitions has slowed dramatically this year. Moreover, Xpedior notes in its IPO prospectus that it has no immediate plans to acquire any new companies. For the nine-months ended September 30, Xpedior posted pro forma revenues of $102.75 mln, an increase of 117% over the year-ago period. The company posted a modest net loss of $778,000, compared to a prior year profit of $471,000. According to International Data Corp (IDC), the worldwide market for Internet professional services will grow from $7.8 billion in 1998 to $78.5 billion in 2003. For the year ended December 31, 1998, the company's ten largest clients represented approximately 33% of pro forma revenues and its 50 largest clients represented approximately 70% of pro forma revenues. No single client represented 9.2% or more of 1998 revenues. Customers included AT&T, FedEx, Charles Schwab, Lucent and IBM. Xpedior's IPO was managed by Donaldson Lufkin Jenrette, First Union Securities, J.P. Morgan and Robinson Humphrey. Initial coverage of the stock should come about the third week of January. Since the quiet period will end during earnings season, the firms may attempt to hold their initial comments until quarterly results are released. Unfortunately, we do not currently have a release date for the company. Valuation Comparison Stock Market-Cap Latest Qtr Sales Trailing P/S Ratio 52-Week Range Xpedior (XPDR 30 3/4) $1.5 bln $34.5 mln 12.7 26 - 33 1/8 Viant (VIAN 85) $1.9 bln $18.8 mln 43.5 18 1/4 - 127 1/8 Proxicom (PXCM 95 3/4) $2.5 bln $23.6 mln 37.9 17 - 105 Scient (SCNT 83 1/8) $5.8 bln $30.1 mln 92.3 13 7/8 - 102 1/4 Upgrades/Downgrades Xpedior (XPDR) Date Broker Action From To 25-Jan-00 DLJ Reiterated Buy 10-Jan-00 JP Morgan Initiated - Buy 10-Jan-00 Robinson Humphrey Initiated - Buy 10-Jan-00 DLJ Initiated - Buy 10-Jan-00 First Union Sec Initiated - Buy from DLJ Research this week: XPEDIOR, INC. (XPDR: $25.00)+* 01/25/2000 Announces Acquisition; Fundamentals Strong; Reiterate Buy Earnings Per Share Old New P/E Ratios (FY:Dec.) 2001E $ 0.15 $ 166.7 2000E (0.13) -192.3 1999E (0.27) -92.6 Rating: BUY Change: None 12-Mo. Target: $-- Yesterday, after the close, Xpedior, Inc. (XPDR) announced it had acquired NewTHINK, a privately held emerging player in eBusiness strategic planning tools and consulting services. Terms of the deal were not disclosed. In NewTHINK, XPDR acquires Enterprise eQ (EeQ), the company's eBusiness planning tool/consulting solution that provides qualitative and quantitative assessments of a customer's strategic readiness to compete in the eBusiness world. Importantly, this is a highly profitable consulting practice that is usually billed out at $300/hour and typically leads to downstream web consulting, design, and integration revenue. Furthermore, the acquisition illustrates that management is executing on its own strategic plan to build a stronger presence in strategy consulting (currently 5% of revenue and targeting 15%). Scott Semple, NewTHINK's CEO and founder, will serve in the role of Senior Vice President of eBusiness strategy where his job will be to continue to expand the strategy practice and to help integrate strategy and solutions. In sum, we believe that this is a positive development for XPDR and uniquely positions the company for strong growth. We would encourage investors to initiate or add to positions given the potential for upside of 50-100%+. Strongly reiterate our Buy rating.