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Technology Stocks : Sapiens International Corporation (SPNSF): Turn around...? -- Ignore unavailable to you. Want to Upgrade?

To: pippin who wrote (1048)	2/9/1998 8:27:00 PM
From: uu	Read Replies (2) \| Respond to of 1936

pippin : > So I'm puzzled, was the price decline due to only meeting numbers or because of the acquisition? Sorry if this is going to be a bit long, but here is my take on SPNSF as of 2/9/98 and after thinking it through. In my opinion the decline in the stock price we saw today was based on acquisition. They did meet the numbers (fully diluted) of $0.09/shr, and believe me this was excellent. Sapiens is showing some serious profits for the first time in its entire existance as a public company! The earnings were impressive. However here is what caused the so called disappointment (IMHO of course): 1. The management has not stated anywhere in the report nor during the conference call the extend of their future revenue potential sand growth. If you read the earnings report they just say that "... Sapiens has set the groundwork for growth in 1998 and beyond!" Now this is not a sort of upbeat statement investors want to hear from a turn around company! Most interpret this as "the company is not so confident about its future and does not feel it can generate the same revenue as it did last quarter, so dont buy the stock unless you can tolerate a lot of disappointment!" In other words most investors viewed their last earnings report as sort of a one time phenomenon! However knowing this management and their lack of ability/willingness for communication (!) I think they are simply playing it very conservative (especially in light of their past problems/law suits, etc.). Sapiens is doing very nicely and they are aggressively getting the work to generate a lot of revenue for 1998 and beyon (especially in Europe and South Africa). 2. The acquisition announcement was a very dumb move! First of all they do not specify exactly how much they paid for the company and the exact amount of cash and/or stock used for the payment (i.e. the exact terms of the purchase agreement). This always leaves speculations and uncertaintly. And we all know in Wall Street no one likes uncertainty. Second of all and as part of the speculation people think further dilution of shares will be in order because of this acquisition. And most likely this will be the case. I personally do not see how Spaines can take advantage of this purchase in their business, but then I am not Ron Zuckerman! And I am sure after going through the pains of past several years, Ron Zuckerman along with the rest of the management team do not just go out and buy a company unless they thought it will benefit the company greatly. So I am not worried about the purchase. Having said all these I continue to strongly believe in this investment because: 1. These guys (the management) do take pride in their work and according to the latest SEC documents they continue to be the major share holders (without selling one single share for the past 4 years). People like Ron Zuckerman and Shai Sole do not simply give up because their goal is to have their shares back at $20+ and this I am most confident of based on my knowldge of their attitude and how they work. 2. Sapiens has just started to show some profit. The fact that they showed $0.09/shr or $0.10 or whatever really should not be mattered. If you knew the internals and infrastructure of this company and how it operated back in 92-94 even showing a break even earnings would have been a miracle. And this is the most important accomplishment this company has shown. In less than 2 years they have done a tremendous turn around of the company and if they can continue this trend I have no doubt in my mind soon this stock will be back in the double digits. For me as a 3 1/2 year old share holder, Sapiens seems a pretty good investment right now and while I will not be buying any more shares nor I recommend anyone buying it at this time (if they already have some) I believe this stock is a definite strong hold with huge upside potentials. I think today we saw perhaps the lows and bottom for the next launch upward. We may see a bit more selling pressure to the low $6 but that will basically be it. While patience is the most frustrating aspect of an investment, it is the only requirement to make huge profits! And as always just my humble opinion! Regards, Addi Jamshidi

To: pippin who wrote (1048)	2/9/1998 8:34:00 PM
From: Maslow	Read Replies (1) \| Respond to of 1936

Couln't beat the day traders on this one if you tried. Remember all those shares bought under 7.00. They were being pumped and dumped today. Bottom line! Believe what you want, I trade this stock often. I also have a long position. Selling will dry up, it always does.

To: pippin who wrote (1048)	2/9/1998 9:36:00 PM
From: marcher	Read Replies (1) \| Respond to of 1936

pippin, First Call shows .09 as estimate, hope this helps: FIRST CALL EARNINGS ESTIMATES SPNSF Sapiens International 02/02/98 Industry: Software SIC: 9999 Latest Price: $7.31 1997 P/E: 31.8 Analyst Recommendation: 1.0 QTR QTR FY FY Dec 97 Mar 98 Dec 97 Dec 98 --- --- -- -- CURRENT MEAN EPS 0.09 0.05 0.23 0.44 Number of Brokers 1 1 2 2 Median 0.09 0.05 0.23 0.44 Standard Deviation - - 0.02 0.02 Current High 0.09 0.05 0.25 0.45 Current Low 0.09 0.05 0.21 0.42 Year Ago EPS - - - 0.23 Current vs. Year Ago Change - - - 91% Report Date - - - - EARNINGS ESTIMATE REVISION MOMENTUM Up Revisions last 7 days 0 0 0 0 Up Revisions last 30 days 0 0 0 0 Down Revisions last 7 days 0 0 0 0 Down Revisions last 30 days 0 0 0 0 EARNINGS ESTIMATES CONSENSUS TRENDS Current Mean 0.09 0.05 0.23 0.44 7-days ago Mean 0.09 0.05 0.23 0.44 30-days ago Mean 0.09 0.05 0.23 0.44 60-days ago Mean 0.09 0.05 0.23 0.44 90-days ago Mean 0.09 0.05 0.23 0.44 COMPARATIVE ESTIMATES AND TRENDS Industry - Software 73.58 75.03 257.96 307.91 Current vs. Year Ago Change 22% 19% 27% 19% Sector - TECHNOLOGY 10.59 8.71 35.90 42.66 Current vs. Year Ago Change 13% 5% 20% 19% WSJ/DJ US Index 11.28 10.54 42.85 48.02 Current vs. Year Ago Change 10% 6% 12% 12% Ratios Relative To: Company Industry Sector WSJ/DJ P/E on 1997 Cal Yr Mean 31.8 40.59 27.05 22.18 PEG on 1997 Cal Yr Mean 1.06 1.87 1.51 1.79 RECOMMENDATION AND GROWTH RATES RECOMMENDATIONS LONG TERM GROWTH RATES Current Mean 1.0 Next 5 yrs - Median 30% Number of Brokers 1 Number of Brokers 3 Industry Recommendation: 2.1 Industry Growth Rate: 22% 7-days ago Mean 1.0 Next 5 yrs - High 35% 30-days ago Mean 1.0 Next 5 yrs - Low 20% 60-days ago Mean 1.0 Last 5 Years NM 90-days ago Mean 1.0 Diff. from Industry +1.1 Rel. to Industry 1.4 Diff. from Sector +1.0 Rel. to Sector 1.7 Diff. from WSJ/DJ US +1.2 Rel. to WSJ/DJ US 2.4 Transmitted: 02/03/98 10:48 (E_SPNSF)