According to Morningstar, there are 61 funds that own a piece of ENTU, representing about 11% of the company's 62 million shares. Here's a list of the major funds owning ENTU...
quicktake.morningstar.com
I also noticed Nortel sold about 8 M shares of Entrust last year. Does anyone know how many they have left? Closely held shares are reported as 17 M and for sure Nortel owns a fair chunk of that.
Here's Sands Brothers comment on the resignation. Share price is currently lower than what they have cited here, making the PE and PEG even more reasonable. The possibility of being acquired is also mentioned...
ENTRUST TECHNOLOGIES, INC. (NASDAQ: ENTU)
CEO Resigns/Company to Accelerate Push Beyond PKI Discontinuity at the Top
Company Description: Based in Richardson, TX, Entrust is one of the
leading players in Public Key Infrastructure (PKI). Its software allows
companies to set up in-house Certificate Authorities (CA) to process
and maintain digital certificates (DCs), which assure the privacy and
authenticity of Internet, extranet and intranet communications. The
Entrust PKI is an integrated, open and scalable software framework
that operates across multiple platforms, network devices and
applications including e-mail, browsers, e-commerce, electronic forms,
and remote access. Entrust’s product line is licensed for use in global
organizations like Citigroup (NYSE: C; NOT RATED), the FDIC,
NASA, the Republic of Singapore and the United Kingdom Post. To
date over 4,000,000 ENTU certificates have been issued.
Highlights
Yesterday, the CEO of Entrust, John Ryan, resigned effective
immediately. On an interim basis, the Company will be led by David
Thompson, executive VP and CFO, and Alberto Yepez, president of
Entrust New Ventures and a member of the Board. This follows on the
heels of the announcements first made on November 13, 2000, that Thompson would be resigning
from the Company, and second, on December 1, 2000, that he would be returning.
In its conference call, Thompson and Yepez stated that it is the intention of the Board to find a CEO
who can move the company beyond PKI. Customers are demanding that Entrust supply “integrated
trust solutions”, something it has attempted to do through its purchase last year of EnCommerce with
its portal access software. However, currently the vast majority of its revenues continue to come from
PKI. The market for large scale PKI deployment is expected to grow 50%, according to the
Company’s expectations and industry forecasts, and Entrust is the largest provider of PKI to Fortune
500 companies. We are projecting FY01 revenues of $238 million. The Company is earnings positive
with $228 million in cash on its balance sheet and no debt.
We believe Entrust will expand upon its strategic relationships with other companies, with a number
of possible likely outcomes: 1) The Company will engage in aggressive cross selling with
complementary companies; 2) The Company will acquire additional “trust solutions”; 3) The Company
will be acquired.
The stock is currently trading at approximately 44x FY01E EPS of $0.32 per share, with a PEG ratio
(p/e to earnings growth) of .80x. Eliminating the cash per share of approximately, $3.40, shares are
currently trading at approximately $10.75, or 33x FY01E EPS and an adjusted PEG ratio of .60x.
Regardless of the outcome, we believe shares in the company offer a compelling valuation at these
levels. Our $40 target price reflects a projected 125x multiple on FY01E EPS, and a PEG ratio of
2.3x.
Additional information on these securities and companies is available upon request.
This report has been prepared as a matter of general information, it is not intended to be a complete
description of any security or company mentioned, and is not an offer to buy or sell any security. All
facts and statistics are from sources believed reliable, but are not guaranteed to be accurate. The
firm, its directors and employees and clients maintains a position in these securities and may at any
time have a position in other securities mentioned in this report, which may increase or decrease over
time. Sands Brothers & Co., Ltd. has participated in the underwriting of this company’s securities in
the past three years or more. Since registered representatives make individual investment
recommendations in the accounts under their supervision, transactions may be effected which are
inconsistent with research reports. Sands Brothers & Co. Ltd., member SIPC. This research report
may not be issued or passed on to any person in the United Kingdom unless that person is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) or is a person to whom this document may otherwise lawfully be issued or passed on.
Sands Brothers & Co., Ltd. makes a market in this security.
SANDS BROTHERS & CO., LTD. INVESTMENT BANKERS MEMBER NYSE 90 Park Ave. New
York, NY 10016 (212) 697-5200 Toll Free (800) 866-6116 Fax (212) 682-8799 515 Folsom Street – 3rd
Floor San Francisco, CA 94105 (415) 836-6000 Toll Free (888) 866-6116 Fax (415) 543-5581 |
