Regarding ENVY and DVNT - recv'd ads today.
From a so-called STOCK NETWORK? (No disclosure).
>>>>>>>>>
Dear Subscriber,
We're writing to update you on two of our past three
recommendations. The stock prices of Envoy Communications and
Diversinet have not moved significantly yet, but their underlying
businesses are doing well. We continue to believe that the
respective stock prices will catch up with the solid business
fundamentals in the near future and they are both good buys at
current prices.
ENVOY COMMUNICATIONS (ECG-Toronto)--Excitement is
brewing at Envoy. The Company had its most successful first half
in their history. For the first 6 months of fiscal 1998 revenues
increased 27% to $12.8 million from $10 million in the second half
fiscal 1997. Net income per share increased 33% to $0.08 per share
versus $0.06 per share in the comparable 1997 period ($0.07 and
$0.05 respectively, fully diluted). Working capital increased to
$6.7 million from $1.4 million and shareholders equity increased
to nearly $11 million from $2.9 million last year.
In July, 1998 Envoy announced that it had closed the acquisition of
100% of Promanad Communications, Inc., making Communiqué
Group the third largest Canadian owned and operated agency in
Canada. Promanad earned $1.2 million before interest and taxes in
the fiscal year ending May 31, 1998. Envoy plans to merge
Promanad into the Communiqué Group, their wholly owned
operating company and take advantage of savings which are
expected to total an additional $1 million of profit before interest
and taxes.
Envoy has been working with Ad Media, which is one of the
leading merger and acquisition firms in the communications
business in New York. They have looked at 6-7 acquisition
possibilities and narrowed it down to one or two and are currently
in negotiations and due diligence. But without any further
acquisitions, they should have about a 79% growth rate locked in
for fiscal 1999.
Envoy, through its operating subsidiary Communique, has won the
Agency of Record assignment for O.N.T.V Television, the
Canadian Olympic Association, and the Bermuda Telephone
Company. O.N.T.V. is owned by Global Television and services
the entire province of Ontario. The Canadian Olympic
Association's will use Communiqué to build awareness of their
programs with athletes, coaches, national sports federations and the
media. With the Bermuda Telephone Company, Communiqué will
work on a broad range of communications activities for BTC,
including strategic planning, advertising, corporate
communications and collateral materials as BTC confronts industry
deregulation.
For the nine months ending June 30, 1998 Envoy reported
revenues of $23.3 million, up 39% from the $16.7 million in the
same period last year. Net income was up 59% to 1.1 million or
$0.11 per share fully diluted compared to $735,840 or $.09 per
share during the first 9 months of fiscal 1997.
As Envoy's second half is usually stronger than the first, we are
expecting about $36 million in revenues and $2 million in net
profit for fiscal 1998. and $0.15 per share fully diluted for fiscal
1998. For fiscal 1999, management believes that, without further
acquisitions, the Company could bring in about $45 million in
revenues. If so we think they could earn close to $0.30 fully
diluted. Depending on the progress of the business, we will raise or
lower these estimates. (All figures are Canadian Dollars).
Between the solid earnings this year, the spectacular potential
growth in the next two years, and the Canadian dollar at an all time
low, we believe that Envoy is an excellent undervalued purchase at
current levels.
DIVERSINET (DVNTF-NASDAQ)--Diversinet has had a wild
ride of late moving up above nearly $4 and then pulling back to
below the $2 level. They were right on schedule launching their
Passport Certificate Server product, which allows companies to
issue digital certificates from their own server, thus offering
increased control and cost efficiency in the e-commerce market.
Fundamentally the Company is doing exactly what they have told
us they would accomplish. The Company and Intrasect
Technologies, the docSpaceTM Company, a deliverer of secure
managed file delivery and storage solutions, announced a licensing
agreement whereby DVNTF's digital certificates will be
incorporated into the latest version of docSpaceTM Express. The
docSpace architecture supports digital certificates, providing the
first secure file delivery and storage service on the Internet that
uses solely a web browser, according to the CEO of Intrasect
Technologies.
The Company also announce it had entered into a licensing
agreement with X and Mail, a leading European provider of e-mail
software and services. DVNTF's digital certificate technology will
enable X and Mail products with secure messaging. Under the
terms of the agreement, Diversinet will supply its Passport
Certificate Server product to X and Mail. The Company will pay
DVNTF a scaled license fee on a per user basis based on the
quantity of certificates supplied. The first order is anticipated in the
fall of 1998. Under the licensing agreement the fee scale will
require X and Mail to pay Diversinet $20 per certificate for the
first 100,000 certificates sold.
DVNT also announced that it had signed a letter agreement
outlining the terms of a business relationship with ComStream, a
global provider of products and technology for satellite
communications markets. DVNT will integrate its Digital
Certificate technology with ComStream's DVB MediaCAST (TM)
Satellite PC Receiver cards to secure the user identification and
authentication. Thus the Company has entered the broadband
wireless communications market where the need to authenticate
authorized system users should become increasingly important.
DVNT has entered into a licensing agreement with GlobalServe
Communications, Canada's largest independent Internet Service
Provider. DVNTF will supply its Passport Certificate Server
product to GlobalServe and the company will pay DVNT a scale
license fee on a per user basis based on the quantity of certificates
supplied. For competitive reasons financial terms were not
disclosed.
Finally, DVNTF entered into a strategic alliance with Deloitte &
Touche, one of the leading professional services firms providing
accounting, tax, and consulting services that create powerful
business solutions for around the world. Diversinet will provide
Deloitte & Touche with its Passport Certificate Server product.
Deloitte & Touche will provide its clients with consulting and
integration services for the Diversinet technology.
Continue to take advantage of the low prices to buy more shares.
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Date: Mon, 28 Sep 1998 11:46:16 -0600
From: info@stocknetwork.com
Subject: Analysts' Stock Network Updates
<<<<<<<<
Regards,
C. |
