TNE - Technology One

[OutToLunch]

TNE have jumped today on high volume and will close at a new high if they hold above 59c. This co. has a lot going for it -- high-quality products, excellent customer relations, fully integrated from product development through to sales and support, and a stated desire to take on the biggest software co's (Oracle, etc) on their own turf as businesses progressively update obsolete software.

I've sat on a small holding for a while and just watched them sleep, but today's spike might signal something's up with TNE. Anyone else watching them?

Yes Doing very nicely out of them. Thank you. Miner had an eye on them at one stage. Must be getting close to their results.

[Stock Man]

Hi Out to Lunch.

I must admit, I hold. Recommended in a tip sheet, but I used TA to enter. Agree enigma - could possibly be a good result.

[OutToLunch]

Hi guys,

It just occurred to me too that they were due to start rolling out one of their products around about now. Maybe it's something to do with that. Someone's definitely raised the 'buy' flag anyway which is a great way to kick off the weekend. [8D]

[Just_roll_it]

TNE seems to be on the rise at the moment. I bought in late Nov '04. Noticed that the company got a write up in the January '05 issue of Shares magazine under the heading "The Dogs Are Barking - they disappointed but these one-time dogs are on the rise". I bought on a combination of FA/TA. The fundamentals point to this being a steady earner with reasonable potential while the TA (in Nov) showed an elliot wave bouncing off a wave 4 heading upward on the wave 5 to top around 80c. My target was therefore 78c as an exit but with the write up in Shares maybe a few people are taking a look at this company.

Does anyone have any thoughts to add to this?

JRI.

[OutToLunch]

Very strong close today. Tech One themselves have been pretty quiet lately, but behind the scenes I'm sure it is full steam ahead. I know their last software release was delayed slightly, does anyone know the latest on their schedule?

The beauty of this co. is their fully integrated approach from development through to sales and support, something that I think will really shine through in years to come as software packages become ever more complex and technical support becomes more and more critical. Definitely happy to hold on to this one. :)

[OneUp]

quote:Originally posted by OutToLunch

This co. has a lot going for it -- high-quality products, excellent customer relations, fully integrated from product development through to sales and support, and a stated desire to take on the biggest software co's (Oracle, etc) on their own turf as businesses progressively update obsolete software.



Agreed - I think you hit the nail on the head. A key competitive advantage for TNE is that they take full responsibility for ensuring their customers' software works. TNE's customer satisfaction levels and retention rates are very impressive. The new version of Finance One is in testing for release - when it comes out TNE's revenue sould benefit. New versions of their other products are also in development. TNE argues that many companies are unhappy with the systems they were sold around Y2K by the likes of SAP and Oracle. Many of these systems now need an upgrade. So, TNE should do nicely over the coming 5-10 years. The great thing about software is that costs are relatively fixed so that additional revenue flows almost straight down to the bottom line. If Finance One is successful, TNE could do very nicely.

I mentioned on the "Potential 10 bagger" thread that I thought TNE could be one. I still do.

[patsy]

I don't know much about TNE as a company but I know a fair bit of the financial systems market in Oz and NZ. The profile of Finance One is lower than that of other financial systems. In fact, Microsoft is getting quite involved in this market after the purchase of Great Plains, Navision/Axapta and Solomon. At the moment, the first two are the ones which are consistently winning most of the deals. As an aside, Finance One has a very thin support and implementation capability in NZ. I would be a bit careful in terms of the revenue growth prospects as they face *very* stiff competition.

[Stock Man]

Hi Patsy,

Yes, interesting isn't it. TNE have just implemented their financial implementation at several local councils around NZ. I checked up and received some feedback.....which was varied (I know ppl involved in the upgrade and training). This varied feedback I received in itself isn't too much of a problem, I put it down more to 'product familiarisation issues'.

What appeared more of an issue was the ability to support the installations/migrations. It appears that demand could be outstripping ability to support[:0]:D Still in a funny sort of way, this is a positive.

[OutToLunch]

Hi there Patsy,

Useful feedback in the face of so many positives lately. I have emailed TNE about this and will post any response from them here. Watch this space...

[OutToLunch]

Here's their response, received about 10 mins ago...

>>Thanks for your feedback today from the Sharetrader forum.

The comment that you have forwarded to me has no basis in fact. I’ll let our results speak for themselves. Technology One has returned compound annual growth of 33% Net Profit After Tax and 30% revenue since 1992, and we consistently win deals against all of Microsoft’s products in a competitive tender process. The fact is Technology One does not see Microsoft as strong competition as they are still struggling to consolidate a 'hotch potch' of overlapping software products that they have acquired over the years, which has left their customers wondering what the future holds for them. Microsoft also uses a reseller model to sell their products which we abandoned years ago because we believe strongly in dealing directly with our customers, and not interposing a reseller between us and our customers.

In regards to our support and implementation capability in NZ – Technology One is the only business software provider that develops, markets, implements and supports our own world class software, giving us complete control and allowing us to deliver complete accountability for our products. Unlike Microsoft, we do not use third-party vendors to sell our products – this means that when a customer needs support for their product they are dealing directly with the people who built the product – delivering a one stop solution...no passing the buck.

Thanks again for passing on this feedback.

[KW]

How this stock ever got classified as a "dog" is beyond me! In fact that's why I topped up post crash at 25c in 2003 - it got so beaten down in the tech wreck that people forgot to notice that it has always been profitable and paid a dividend. It's been a quiet but steady progressor - up 57% off its year low, and up 128% off my average buy price for me over 2.5 years.
Its a well run company with a return on capital and equity above 19% every year on record. I forsee no reason why TNE would not outperform the market especially as the IT industry is really beginning to pick up again.

[OneUp]

I agree KW. TNE has always been a quality company - it's share price could not possibly hope to satisfy the absurd expectations placed upon it by share investors. These "new paradigm" expectations were not TNE's fault - they've just kept doing what they do well.

[Xerof]

a 16 mill parcel crossed today sub mkt price. Any goss?

[OneUp]

Hi volume in the last hour and a 7% jump in the share price. Any ideas why?

[Gazza-nz]

TNE has just taken off over the past week, I cant see anything in the fundamentals that would push this stock to much. I do see however that they are doing a stock buy back. This would apear to be the reason for the increase, but was checking to see if anyone new of something in the wind that isn't out there in the market yet

[OneUp]

The fundamentals of TNE are solid. Market just not paying attention to them while there are fortunes to be made elsewhere.