|Written by GSCR Staff|
|Thursday, 16 January 2014 04:43|
In Monday’s Goldman Guide titled “What the Market is Telling Us” we said say yes to tech! Tech was a great play in a slowly improving economy for 2013 and appears be continuing and maybe even heating up in 2014. Look to the Google (NASDAQ – GOOG) acquisition of the smart thermostat and smoke alarm producer Nest this week for $3.2b billion. Google is looking to expand its product line into the high end ‘smart home’ product line. This is a clear example of mega tech players looking to add and expand product portfolios, and with plenty of cash on hand, buy-outs make more sense than organic development.
On a side note, home and personal security technology and software related to the ‘smart home’ has been a nice niche sector over the past year or so. We highlighted LifeLock, Inc. (NYSE – LOCK) around Valentine’s Day last year and the stock is up over 95%. This one is probably a keeper for now.
Actuate Corporation (NASDAQ – BIRT - $7.89) is another software and technology firm that is another hot micro sector – ‘Big Data’. The ActuateOne suite of integrated commercial products enables corporations and packaged application software vendors to develop and deploy custom business intelligence, analytic, and customer facing information applications targeting browsers and mobile touch devices. The Company offers a suite of business intelligence and reporting tools (BIRT)-based BI, analytics, visual data mining, and reporting features within the integrated ActuateOne suite, providing in-memory analytics, user configurable dashboards, ad-hoc query, interactive mobile and Web content, brochure reporting, and spreadsheet analysis. It also provides BIRT iHub, which powers, integrates, and manages BIRT-based information and analytic applications; and BIRT Analytics, an interrogative tool designed to allow business users to uncover trends, visually mine for unknown correlations, and perform time-series extrapolation for forecasts on data assets, such as social media, Internet data, machine generated data, and traditional corporate sources. Some of this may sound Greek, but a multitude of companies in all sectors are shelling out big money on software programs tailored to analyze ‘Big Data’ to add and keep customers.
From a stock perspective, BIRT is very attractive based on analysis with our three tier evaluation given current market conditions. The Daily Moving average is very bullish all the way out to 50 days. The stock has climbed nearly 11% on an average volume of over 200,000 shares traded per day over the last month in the beginning of this current accumulation phase. Finally, with forecasts for revenue of $146 million for 2014 and a healthy gross margin of 85%, the forward 12-month P/E is a low 21, compared to the trailing 12-month P/E value of 61.
BIRT is an attractive buy and should hit the $9.00 level later on this quarter, or early in 2Q14 at the latest.
Have a great day!
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com