At 08:14 AM 7/19/01 -0600, Bill Thoen wrote:
>Jun 1, 2001: Barry Sahgal, senior managing director at Brean Murray,
>spoke at recent meeting of the Stock Pickers Club and listed MapInfo
>(symbol: MAPS) as one of three to buy.
That's one of the lousiest near-term calls that was made in this
market. One June 1, MAPS was at $30 with a PE over 50: an exceedingly rich
premium that priced in extraordinary growth. Insiders were selling
enormous amounts. At this moment, it is at $14 with a PE under 30, much
more in line with the prices of other techs that are still making money.
>Also in June, Business Week listed MapInfo as the No. 1 company in
>terms of average annual earnings growth, up 849 percent over the
>past three years.
Let's not confuse past performance with future possibilities. Furthermore,
over the long term--since MAPS first showed positive earnings in 1993--the
earnings growth rate has averaged only 10 percent per year. The 849
percent is a sucker's number, purely an artifact of lousy earnings in 1997.
>There's a lot of conflicting analysis between this month and last,
>yet only two of the nine analysts tracking MapInfo stock have
>downgraded it so far
Just look at the track records of the analysts following any of the techs
last year. Typically, they continued to issue "strong buys" all the way
down. Lack of downgrades is no guide to performance.
>, despite the fact that it's pretty low right
>now. It seems to me that the business hasn't changed and the
>product's still outstanding, so is this a good time to buy or is the
>weight of the world taking MapInfo down along with the rest of the
>market?
The value of MAPS is less in the basic product and more in "key vertical
markets" such as financial, retail, telecommunications, CRM, and even e911
services (with a nod to Sahgal, who may have been prematurely correct,
after all). The future value of the company hinges on management being
able to execute their strategy of growing in these markets. If they can,
the current value is indeed low. Does anyone have any insight into these
aspects of MapInfo's business? Anybody want to publish some success stories?
Bill Huber
_______________________________________________________________________
List hosting provided by Directions Magazine | www.directionsmag.com |
To unsubscribe, send e-mail to [EMAIL PROTECTED] and
put "unsubscribe MapInfo-L" in the message body.
