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quote:Originally posted by thereslifeafter87
I just picked up about 5000 of these in the last week or so.
Very interesting stock.
The company provides document retrieval and database solutions to large corporates and government departments. It operates all around the place, including contracts in NZ, Aus, and Scotland. It is constantly announcing new large contracts to the market that it keeps winning in a competitive tendering process.
It was a dot bomb (check out the chart from listing), but over past 2 years has performed well.
This company has a forward PE of 18 (assuming no growth in earnings in the second half), with extremely high earnings growth over recent years. This includes a Return on Equity of over 50%
I originally placed it on my watch list about six months ago, and took more interest in it recently when I noticed the price had doubled.
It has a large free cashflow that it can reinvest in growth.
My one concern is whether its revenue is of a repeat nature. It states on its website that it earns fees from the sale of software, initial consultations, and ongoing maintenance. However, it doesn't break down the percentage each contributes to revenue.
Directors hold 125 million of 135 million shares, and have been buying from the end of last year to current date (there is one sale notice only). This small free-float means that when the price moves, it will move rapidly - like ATR.
I think this is a fantastic company that will continue to grow
earnings. I see it as being on a forward PE of 14-15 once second half growth is taken into account. A re-rating of the company could put it on PE's as high as 30.
Comments?