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BBS: The Executive Network Information System - New York 914 667-4567
Date: 05-13-93 (12:15) Number: 22042
To: ALL Refer#: NONE
From: ERIC.CANNELL Read: NO
Subj: Re: Stock Picks Status: PUBLIC MSG
Conf: Misc.Invest (1291) Direction: FORWARD
In article <1sqsjf$n1j@fnnews.fnal.gov> fausey@fnfaus.fnal.gov (Matt Fausey)
writes:
>Artisoft:
>
> Designs, manufactures, markets, and supports LAN software and systems
>and communications devices designed to enhance the productivity of PC users.
>
<deleted text about numbers and how it looks like it might rebound>
>
> No Company News lately
>
> *** The main risk with this stock is the profit margin. If this
> continues to decrease, this will hurt the stock price. So
> the main question is: Who are Artisoft's competitors? If anyone
> knows, please let me know.
First of all, Artisoft's big claim to fame is it reasonably priced
peer to peer networking for PC's. Their flagship product is called
Lanstastic. Overall a great product and very popular with people
needing to connect only a few hundred (300?) PC at most. Peer to peer
networking means that my PC and your PC can talk to each other without
a dedicated server PC. Products like Novell require the dedicated PC,
which means extra $$$. Of course, Novell can connect 1000's of PC's,
but you pay for it.
Competitive Advantage: An excellent, low priced product that appeals
to a broad market segment consisting of small businesses and departments
within larger organizations.
Current Affairs: Founder has retreated to the R&D lab to invent some more
great stuff. He hired in an experienced PC business manager as president.
Strategic Problem: Stock price has suffered because of Artisoft's difficulty
in introducing new products to follow up their widely successful Lantastic.
The result is that the company has been unable to sustain its historic
growth patterns. And since stock prices often reflect future expectations.....
Competitors: Forget about companies with similar products, hell I cannot even
name one. In this peer-to-peer networking market you have to look to who
will be there eventually or getting their now. Namely MICROSOFT and NOVELL.
Novell's Netware Lite is a product that will compete with Lantastic.
(Correct if I am wrong:). MICROSOFT has Windows NT.
I think the biggest fear Artisoft has is that Microsoft will build peer-to-
peer into MS DOS. Apple built this into the Mac (Apple Talk?). Look at how
MS put disk compression in to DOS 6.0 and how Stacker and others are
scrambling to assess the damage. Did you know that Microsoft offered to
acquire Artisoft? Offer was rejected, but you can bet the Mr. Bill is
thinking about peer-to-peer for 7.0 or 8.0.
Opportunities: Artisoft is attempting to broaden their product line. The
only area I know of at the moment is groupware (like Lotus Notes). They
are developing a product called Kivaware or something like that.
Interesting note: Artisoft is located outside of Tucson, AZ. The term
"KIVA" is taken from the southwestern American Indians. A kiva is basically
a round, open aired, broad but shallow pit that was used for tribal
group meetings. Get it? kiva <-------> group software. (Yes, one does
learn something from those blow off courses in college:)
Final note: The BIG QUESTION is whether Artisoft can transition from
a one product company to a mature, diverse product line company. Who knows?
BBS: The Executive Network Information System - New York 914 667-4567
Date: 05-12-93 (13:03) Number: 22020
To: ALL Refer#: NONE
From: MATT FAUSEY Read: NO
Subj: Stock Picks Status: PUBLIC MSG
Conf: Misc.Invest (1291) Direction: FORWARD
Here are two stocks that I'm VERY interested in buying: Artisoft (ASFT)
and Read-Rite (RDRT).
Artisoft:
Designs, manufactures, markets, and supports LAN software and systems
and communications devices designed to enhance the productivity of PC users.
Price: 7 3/8
P/E: 11.38
P/S: 1.51 Year Ago: 6.11
P/Book: 1.63 Year Ago: 6.15
R/S: .27 (really been clobbered)
Quick Ratio: 9.02
Current Ratio: 10.31
Profit Margin: 13.3% Year Ago: 18%
Debt/Equity: 0%
1 Year 3 Year 5 Year
Sales Growth: 78.6 86.3 140.2
Earnings Growth: 103.1 64.1 239.0
Technical Analysis: The stock looks like it could be forming a bottom
for a major trend reversal.
No Company News lately
*** The main risk with this stock is the profit margin. If this
continues to decrease, this will hurt the stock price. So
the main question is: Who are Artisoft's competitors? If anyone
knows, please let me know.
Read-Rite:
Is one of the leading independent suppliers of thin film magnetic
recording heads for Winchester disk drives, 5 1/4" and smaller.
Price: 14 1/2
P/E: 8.32
P/S: 1.01 Year Ago: 3.88
P/Book: 1.45 Year Ago: 15.24
R/S: .72
Earnings/Share: $1.93
Profit Margin: 12.2% Year Ago: 13%
Debt/Equity: 0
Quick Ratio: 2.81
Current Ratio: 3.36
1 Year 3 Year 5 Year
Sales Growth: 120% 129% 94%
Earnings Growth: 103% 167% NM
Cash & Equivalents: 155 million
#shares outstanding: 34.3 million
Cash/Share: $4.50
*** The price of the stock is $14.50, but 4 1/2 of that is cash
(there's no long-term debt). So that means the comany is
selling for $10 a share, and they earn $1.93 a share. So the
cash-adjusted P/E is 10/1.93 = 5.18, which is good!
Please let me know if you have any important information about these stocks.
If we all share information, we can all make a profit in the market!
After all, do brokers and Wall Street analysts read this news group?
Probably not. As a group, we could INSTANTLY analyze a stock if everybody
contributed what they know. Especially stocks in the computer and software
industry, since most of us are experts in the industry. This, I think, could be
a much greater asset than a bunch of historical stock quotes.
BBS: The Executive Network Information System - New York 914 667-4567
Date: 05-13-93 (22:09) Number: 22078
To: ALL Refer#: NONE
From: MATT FAUSEY Read: NO
Subj: Stock Picks Status: PUBLIC MSG
Conf: Misc.Invest (1291) Direction: FORWARD
If nobody minds, I'm going to post information about stocks that
I've selected as 'interesting'. Some of them I may own, others I'm watching
and waiting. They are all computer-related. Here's the list:
Symbol Company
------ -------
ASFT Artisoft
BORL Borland International
NWTH Networth
RDRT Read-Rite
REXN Rexon
-------------------------------------------------------------------------------
Artisoft:
Designs, manufactures, markets, and supports LAN software and systems
and communications devices designed to enhance the productivity of PC users.
From Eric Cannell:
First of all, Artisoft's big claim to fame is it reasonably priced
peer to peer networking for PC's. Their flagship product is called
Lanstastic. Overall a great product and very popular with people
needing to connect only a few hundred (300?) PC at most. Peer to peer
networking means that my PC and your PC can talk to each other without
a dedicated server PC. Products like Novell require the dedicated PC,
which means extra $$$. Of course, Novell can connect 1000's of PC's,
but you pay for it.
Competitive Advantage: An excellent, low priced product that appeals
to a broad market segment consisting of small businesses and departments
within larger organizations.
Current Affairs: Founder has retreated to the R&D lab to invent some more
great stuff. He hired in an experienced PC business manager as president.
Strategic Problem: Stock price has suffered because of Artisoft's difficulty
in introducing new products to follow up their widely successful Lantastic.
The result is that the company has been unable to sustain its historic
growth patterns. And since stock prices often reflect future expectations.....
Competitors: Forget about companies with similar products, hell I cannot even
name one. In this peer-to-peer networking market you have to look to who
will be there eventually or getting their now. Namely MICROSOFT and NOVELL.
Novell's Netware Lite is a product that will compete with Lantastic.
(Correct if I am wrong:). MICROSOFT has Windows NT.
I think the biggest fear Artisoft has is that Microsoft will build peer-to-
peer into MS DOS. Apple built this into the Mac (Apple Talk?). Look at how
MS put disk compression in to DOS 6.0 and how Stacker and others are
scrambling to assess the damage. Did you know that Microsoft offered to
acquire Artisoft? Offer was rejected, but you can bet the Mr. Bill is
thinking about peer-to-peer for 7.0 or 8.0.
Opportunities: Artisoft is attempting to broaden their product line. The
only area I know of at the moment is groupware (like Lotus Notes). They
are developing a product called Kivaware or something like that.
Interesting note: Artisoft is located outside of Tucson, AZ. The term
"KIVA" is taken from the southwestern American Indians. A kiva is basically
a round, open aired, broad but shallow pit that was used for tribal
group meetings. Get it? kiva <-------> group software. (Yes, one does
learn something from those blow off courses in college:)
Final note: The BIG QUESTION is whether Artisoft can transition from
a one product company to a mature, diverse product line company. Who knows?
From Ed Zhong:
i do follow both asft and rdwt.
the most part of asft's revenue is from its lan operating systems (it
also makes some lan related circiut boards and connectors). its comptitors
include novell(novl), microsoft(msft)[i mean ms nt here] and banyan sys
(bnyn)[it is as small as asft with about $300 mil market value]. asft
reported both very poor sales and very poor earnings in the past 2
quarters. personally i rather buy asft at $10 when it shows reasonable
growth in both sales and earnings. if you are a technical trader, i
suggest buy at 7 and sell at 8 between the 10-q intervals.
Price: 7 3/8
P/E: 11.38
P/S: 1.51 Year Ago: 6.11
P/Book: 1.63 Year Ago: 6.15
R/S: .27 (really been clobbered)
Quick Ratio: 9.02
Current Ratio: 10.31
Profit Margin: 13.3% Year Ago: 18%
Debt/Equity: 0%
1 Year 3 Year 5 Year
Sales Growth: 78.6 86.3 140.2
Earnings Growth: 103.1 64.1 239.0
Technical Analysis: The stock looks like it could be forming a bottom
for a major trend reversal.
No Company News lately
-------------------------------------------------------------------------------
Borland:
This stock is in the news so much, that I'm not going to try to keep
up. Suffice to say that I think its a good buy at 25 to 27.
-------------------------------------------------------------------------------
Rexon:
This stock I found interesting for a combination of technical and
fundamental reasons.
Price: 5.00
Free Cash Flow/Share: 22%
Long-Term Debt: 0 (maybe a few percent, my notes are at home.)
I bought this stock on April 28th for $5 a share, and it instantly went up
to 6 just as I expected. Today, May 13th, it is back to 5 again, so I'm
on board again for another ride. I'll get the fundamentals on this one
tommorrow.
-------------------------------------------------------------------------------
Networth:
This company's stock is very interesting. Here's some numbers:
Price: 12
Debt/Equity: 0%
Cash: 30 million
#shares outstanding: 5 million
Cash/Share: $6
Earnings/Share: .32
Growth rates: don't have the numbers here, but they are at least 50%.
This is the company whose stock doubled on its IPO. Since then it
has been beaten down severly. Because of the cash, you are really getting
the company for $6 a share. For each point this stock drops, it is really
a much bigger drop than it seems. For example, a drop from 12 to 11,
when you take out the cash, is really a drop from 6 to 5, and this REALLY
affects the P/E ratio.
-------------------------------------------------------------------------------
Read-Rite:
Is one of the leading independent suppliers of thin film magnetic
recording heads for Winchester disk drives, 5 1/4" and smaller.
From Ed Zhong:
rdrt has a very good looking balance sheet. however, the
whole harddrive group is very low... sgat w/ pe 8, mxtr w/ pe 5. and if you
just look at cnr's 10-k, you won't believe that it is selling at 12 1/2.
foundamentally, rdrt is still sounding, but i won't be surprised to see it
remaining in the teen level for next a year or two.
My own comment:
Check out the disk drive companies and you'll notice that most of them have
long-term debt to equity ratios of 30-40% or more. Read-Rite has 0, and
sells at the same P/E. As long as this company is available for the price
its at, I wouldn't even consider Maxtor, Micropolis, or Seagate.
Price: 14 1/2
P/E: 8.32
P/S: 1.01 Year Ago: 3.88
P/Book: 1.45 Year Ago: 15.24
R/S: .72
Earnings/Share: $1.93
Profit Margin: 12.2% Year Ago: 13%
Debt/Equity: 0
Quick Ratio: 2.81
Current Ratio: 3.36
1 Year 3 Year 5 Year
Sales Growth: 120% 129% 94%
Earnings Growth: 103% 167% NM
Cash & Equivalents: 155 million
#shares outstanding: 34.3 million
Cash/Share: $4.50
*** The price of the stock is $14.50, but 4 1/2 of that is cash
(there's no long-term debt). So that means the comany is
selling for $10 a share, and they earn $1.93 a share. So the
cash-adjusted P/E is 10/1.93 = 5.18, which is good!