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Technology Stocks : CSGI ...READY FOR TAKE-OFF! -- Ignore unavailable to you. Want to Upgrade?

To: TEDennis who wrote (1637)	12/20/1997 12:44:00 PM
From: BM	Respond to of 3391

TED, it's always refreshing to see someone who can read and draw logical conclusions from what is presented, as you have done. Cognicase did not identify the 1974 client in the release nor did it so in the prospectus for the IPO. I suspect (based on royalty payments received in 1994, again from the IPO prospectus) that the tool was being used by CGI Group, who today are a major Y2K player and partial competitor to Cognicase. I say partial competitor because CGI is also a partner as it is still using Cognicase for some of its clients. By the way, Cognicase is a Canadian company so there should no surprise at its claim to do have done a conversion for a Canadian company. In addition to CGI, Cognicase is used by some of Canada's largest IT consulting firms such as SHL (an MCI company) and DMR (an Amdahl company) - both have set up Cognicase-based Y2K factories in Montreal.

To: TEDennis who wrote (1637)	12/20/1997 5:08:00 PM
From: tech	Respond to of 3391

Ted, sounds like you should go buy some COGNICASE. personally, I am sticking with CSGI and I will be buying more the last week of the year. Once a few more contract announcements are made, and some new partners come into the game, we should see significant movement in the stock. I am extremely confident that CSGI will move, at least, 100% higher from present levels. BTW- In Canada I like AGISS. At current levels a few contract announcements could move the stock up significantly. At $1.50 to $2.00 its pocket change to play this one. Never mind the fact that they have the potential to be awarded a $10 million contract with the Canadian Gov. (CSGI's tool will be used to convert a good portion of the code) and the 3M assessment project in N.C. (home of another famous y2k company) that may lead to a significant contract from them as well. The y2k sector is going to outperform all other sectors in the next 2 years and maybe even beyond. Any company that has a toolset that can speed up the conversion process, eliminate almost all the errors, and at the same time not require the assistance of hundreds and hundreds of programmers, will be seeing great demand for their services. Those year 2000 companies who can limit their payroll expenses and still increase capacity will be able to take full advantage of the increases in the price of conversion projects as we have more and more demand come in. The year 2000 bottleneck can not be avoided. We we already see ever increasing demand for programmers and a jump in the price per line of code is bound to take place. Those companies who are trying to do the projects in-house will be effected the most. They will have to pay higher and higher payroll costs, while at the same time trying to fight off the problems with the potential decreases in revenues due directly to the problems in Asia, or the potential slowdown in the economy that may result from those problems overseas. Those companies who have significant exposure overseas and at the same time have year 2000 problems they have not addressed will get SLAMMED. As the demand for year 2000 work continues to climb and the salaries for programmers continues to increase, the option for companies to do the work in-house will not be a feasible one. This is even more so if the problems in Asia continue to put pressures on revenues either directly or indirectly. This Asia problem has happened at the absolute worst time for companies who had planned to budget for year 2000 in terms of the revenues they were use to seeing for the last couple of years. We are already seeing that, one after the other, companies are coming forth with warnings of lower than expected revenues. Demand pressures will also hit the year 2000 companies as well. Although all year 2000 companies should do well, those companies that have hired programmers to use in conjunction with automated assisted toolsets will see that even though their revenues will increase due to the rise in price per line, they will also face higher payroll costs due to the demand for programmers. That is why I like companies that have the automated factory approach with the least demand for programmers. These companies will be best positioned to take advantage of the huge demand that will take place. They can limit payroll expenses and, at the same time, take full advantage of the increases in price per line. These companies should be able to underbid most of the competition and offer faster, cheaper, and more accurate conversions. So far, the bottle neck has not hit, and we have seen companies such as PTUS, SEEC, VIAS, etc. do well. However, once the demand pressures cause a jump in the price of payroll costs related to doing year 2000 conversions, then the demand for in-house tools may be effected. If companies can't afford to pay the programmers to use the tools, then there is no point in doing the projects in-house. I feel that we will see the wrap around providers such as KEA, who use these tools, to change their strategy and start using the conversion houses to wrap their services around. There will be just too much demand for them to use tools and bodies alone. They will have to look to companies such as CSGI who offer automated conversion services. Investors will also see the shift in revenues from other sectors flowing into the year 2000 sector. It is my feeling that they will follow the money trail and we should see them flocking to the y2k stocks. I expect some of year 2000 stock to be trading at multiples of 100+ before the end of Q4 1998 In conclusion, you may choose to poke fun at companies who use terms that are not exactly to you liking, but those of us who have done our homework know what will happen once the flood gates open. ConSyGen only has approx. a $4 million burn rate and even if they only convert 50 million lines of code in all of 1998 at a avg. price of $.30 per line that should give them a eps of approx. $.64 (on 17 million shares outstanding.) $.64 x multiple of 30 would give them a stock price of $19.20 x a multiple of 40 = stock price of $25.60 x a multiple of 50 = stock price of $32.00 Now don't forget that the above is only considering 50 million lines at an avg. price of $.30 in ALL OF 1998!! I will tell you that I think the price per line may near $.50 to $.75 by Q4 of 1998. I will also tell you that CSGI should get a lot more code than just 50 million lines. Their alliance partners AGISS, SCBI, Millennium, and Strategia should provide them with contracts and never mind the possibility of getting a project from Motorola and other projects CSGI may win by themselves. 50 million lines of code is a pathetically low est. as well as the avg. price of $.30 per line for all of 1998. I will be buying a lot more CSGI before we move into the new year.