Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (44804)	10/4/2011 10:35:12 PM
From: J Mako	Read Replies (1) \| Respond to of 78673

Jurgis, re: ADVC. Wow, many great points. I can answer a few of them: - The company originally worked on desktop-based EDI connectors to allow companies to connect to VAN-based EDI backbones. It nearly died in late 1990's when everyone was moving their infrastructures to the web. In 2000 the CEO backlisted to raise capital to bet on web-based EDI. So, in one sense, it's core business has been around for 10 years. - Information is sketchy. But I believe ADVC actually runs Kroger's EDI backbone and this forms the core of its client base and it expanded from there. ADVC formed a partnership with iSoft in early 2000's and iSoft implemented Wal-Mart's EDI backbone. So I believe that's how ADVC got to connect to Wal-Mart and get some of its EDI traffic. - 20% of ADVC's business is in e-doc integrator. I think that's the "maintenance contract" you referred to. That's low margin and cyclical business. The CEO acquired the business from his brother in 2007. This fact alone isn't very comforting. But it appears there is some synergy between the 2 businesses and they managed to cut cost over the years. It doesn't concern me much because it's a small portion. - It appears to me its recent R&D is on modernizing its software to "Web 2.0". (For the tech savvy, it means AJAX.) and the project was completed last year. - The whole EDI field is huge. Even the grocery EDI field alone is huge. (I got the figures somewhere in my notes. I need to dig it out.) The web based EDI business is highly fragmented. A lot of large organizations uses their own systems to do document exchange. There are indeed many vendors that provide services in the same space. My view is, ADVC focuses on small suppliers that big competitors aren't going after. <right now there are tons of companies at low prices, so buying illiquid microcap becomes a tough choice. It did not drop much yet, so it might not go up much either compared to some potential V shaped recoveries. > I can't argue against this.

To: Jurgis Bekepuris who wrote (44804)	10/4/2011 10:45:32 PM
From: Sergio H	Read Replies (1) \| Respond to of 78673

Nitpicking ...you missed it. They are not a software co. but an Internet-based electronic commerce document processing gig. Did you see the profit margins and the dividends and the special dividends, not to mention the special dividend already written off to be paid before the end of the year? And did you take a look at the biz plan? They don't need R & D if you look at the plan. It's a cash machine.