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Stockgroup Information Systems Reiterated 'Buy/4,' Target $0.60 By Investrend Analyst Ryan Fuhrmann, CFA: Target Said 'Conservative' Business Wire - January 12, 2006 08:28
NEW YORK, Jan 12, 2006 (BUSINESS WIRE) -- (Investrend Research Syndicate) Stockgroup Information Systems. (OTC.BB: SWEB; TSX Venture: SWB), has been reiterated at a "Buy/4" rating and target valuation of $ 0.60, by Investrend Research analyst Ryan Fuhrmann, CFA, saying the target is conservative.
The analyst further stated:
We maintain our Buy rating on as we continue to have confidence that it is beginning to achieve consistent profitability going forward while continuing to expand its businesses. Our confidence has increased over the past 12-24 months as the company has evolved into its current business plan, eliminated all of its long-term debt, and is beginning to consistently deliver positive net income, cash flow from operations, and free cash flow.
Our price estimate is $0.60 and is based on a discounted cash flow and comparable analysis. We believe our price target is conservative; subsequent increases in the target are contingent on improvements in bottom line profitability.
For the third quarter, revenue increased 11.6% (to $1.37 million) as compared to Q3 2004. Revenue for the nine month period ended September 30, 2005 increased 24.5% (to $4.30 million) as compared to the nine month period ended September 30, 2004.
Free cash flow is also showing a favorable trend and is also expected to be positive for the coming full-year period.
An institutional investor (US Global Funds) recently purchased a 9% interest in SWEB. Additionally, the financial content business model is being confirmed as attractive and profitable.
As mentioned previously, Hoovers was acquired by Dun & Bradstreet for 2.5x revenue and Multex was acquired by Reuters for nearly 2.6x revenue and 20x EBITDA. On July 23, 2003, MarketWatch.com (MKTW) acquired Pinnacor (PCOR) for what amounted to approximately 2.9x-3.1x revenue. The transaction closed on January 16, 2004. Most recently, Dow Jones acquired MarketWatch.com for $519 million in cash ($18 per share); this merger was announced on November 15, 2004. This equated to approximately 6.0x revenue.
2005 revenue estimates stand at $6.3 million. For the year we are estimating EPS of $0.02 on a revenue increase of 30%.
Stockgroup Information Systems is enrolled in Investrend Research's pioneering professional research program and has paid a continuous Institutional Coverage fee of $32,490. Investrend Research subscribes to the "Standards For Independent Research Providers" at http://www.firstresearchconsortium.com It has also been enrolled for shareholder monitoring by members of the Shareholders Research Alliance at http://www.shareholdersresearch.com.
Complete information about this company is available at the company's InvestorPower page at http://www.investrend.com/company/ list.asp?sPathParam=yes (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field.), and the full report is available at www.investrendresearch.com. Investors are advised to read disclosures carefully before trading in the equities of any enrolled company.
Anyone interested in receiving alerts regarding Stockgroup Information Systems research should email contact*investrend.com with "SWEB" in the subject line.
SOURCE: Stockgroup Information Systems
Stockgroup Information Systems Stockgroup Media Inc. Doug Keast, 604-331-0995. Web site: http://www.stockgroup.com or Investrend Research Div. Investrend Communications, Inc.: R. Hempel, 718-896-5060, email: contact*investrend.com Website: www.investrendresearch.com
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