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

To: porcupine --''''> who wrote (6077)	2/21/1999 6:20:00 PM
From: EACarl	Read Replies (1) \| Respond to of 78499

To group: Uncommon value for software company. I have hesitated posting this at higher levels even though at $6 and $5 I still thought was a great value. AT $4, I felt now it is time. I have followed this company since last October. Infinium Software. (INFM). The Numbers: Stock price = $4.1875 Cash per share = $3.34 Price/cash = 1.25 Price/sales = .5 Price/book = 1.18 Shares out = 12.6 million. 52 week high = $23.25 52 week low = $4.125 Earings last four quarters 3-98 = $.10 6-98 = $.19 9-98 = $.20 (end of fiscal year) 12-98 = $.08 (this quarter is always weakest) Average estimate for fiscal year ending 9-99 = $.63 These numbers represent a low valuation rarely seen for a software company. WHY? The main reason is that INFM is an "enterprise software" company sometimes called "ERP". Some larger companies in this area are: JDEC, PSFT, SAP, BAANF. Compare the per share values of these with INFM , and you will like what you see. Wall street hates this whole sector now because there is a fear (justified at this point) that this sectors customers are concentrating their software and Information systems efforts on becoming Y2K compliant, and thus delaying other software purchases. The good news is unlike some sector or company specific problems we can all be sure that the Y2K is a temporary problem. Once it is passed, this should be more positively viewed again. Wall street (in its typical short-sightedness) sees this stock trending down, and knowing that it is probably "dead money" short term is abandoning it in favor of whatever is performing now. Another Knock on INFM is that it was dependant on mid range (AS400) systems. That is changing. The company has been heavily investing in , and creating new products for Windows NT. A little background on the price history. This small cap company along with most other small caps got hit hard late last summer and fall with the market in general. Sector fears may have had a role partially then also, and the selling fed on itself until at exactly the wrong time (10-98) the company reported earnings that missed by $.02 (came in at $.20) which crashed the stock from about $10 to $5. After a small rebound, it got caught up in tax selling, and slipped back down again. This year, it had a January effect rally, and after the most recent earnings report (which met estimates) has continued to slip for the reasons listed above. Which brings us to the value we now see. I don't have any expectations of getting rich quick here, but with a 12 month view, I think INFM is a good place to be. You may have heard of some of the larger ones such as Yahoo research = biz.yahoo.com Yahoo profile = biz.yahoo.com Most recent earnings report = biz.yahoo.com Company web address = infinium.com Yahoo message board (recently some very good discussion here) messages.yahoo.com SI board does not have much activity. I have tried to present the + and - here, and I do appreciate any feedback. best to all, Eric.

To: porcupine --''''> who wrote (6077)	2/21/1999 6:31:00 PM
From: Daniel Chisholm	Read Replies (2) \| Respond to of 78499

Porc, re: LWN, Too bad you couldn't convince your reader to sell when the selling was good. I was going to short it then, but just couldn't get a good enough handle on it to be comfortable with it to be convinced that it would be an "investment grade" short. (Hey, if I'm going to mention shorting on this thread I've gotta keep in line with Graham et al. ;-) The principal owner was forced out within the past year. If that was a big problem as you indicate (I was not aware that it was), then that certainly fixes that. "Blockbuster Mortuary", I like that! True, the economic rationale behind bringing many small funeral homes under one roof may have never existed. But provided that the debt is safely less than the intrinsic value and the debt servicing capabilities of the operation, could one not look at this as an opportunity to purchase a a large block of viable businesses at a bargain price? (If in fact both those characteristics are true! As I said before, I don't know the answers yet). I.e., provided the price is cheap enough and the debt manageable, who cares if 1000 funeral homes offer no economies of scale at all? Something I find surprising is that industries which I "feel" to be very expensive (for the value given), such as funeral homes, military contractors, aerospace firms etc, do not seem to necessarily generate exceptional business returns for their shareholders. It's as if their high cost to value is due to inefficiency and not fat profit margins. - Daniel