NEW YORK, May 20, 2004 (PRIMEZONE) -- The following is an investment opinion issued by Investrend Research Syndicate:
Investrend Research analyst Ryan Fuhrmann, CFA, has issued an Update on Stockgroup Information Systems, Inc. (OTCBB:SWEB) (TSX Venture Exchange:SWB), assigning the company a "Speculative Buy" and an intrinsic value of $0.60, based on its achievement of "positive cash flow."
"Revenue increased 54% year over year. On May 12, Stockgroup announced Q1 2004 results. Revenue increased 74%," noted Fuhrmann. "Cash on hand is more than sufficient to handle any unexpected downturn in business and should only grow from this point forward.
"Our 2004 estimate assumes $5.1 million in revenue is achieved. For the year we are estimating EPS of $0.01 on a sales increase of 70% to $5.1. 2004 revenue estimates could prove conservative.
"We believe Stockgroup's visibility is improving and the business model initiated three years ago is succeeding. Our price estimate is $0.60 due to a discounted cash flow and comparable analysis. This could prove conservative should revenue growth exceed our projections or should SG&A expenses slow considerably from their current pace," said Fuhrmann.
Also, he said, impressive clients continue to sign on to SWEB's product offering. "Additionally, Road Runner signed a licensing agreement for Financial Software and Content System product and Google chose SWEB to provide advertising to its clients."
Finally, said Fuhrmann, recent acquisitions in the industry, such as Hoovers by Dun & Bradstreet for 2.53x revenue and 81x net income and Multex by Reuters for nearly 2.6x revenue and 20x Ebitda, or Pinnacor by MarketWatch.com for approximately 2.9x -- 3.1x revenue lend credence to the price target.
The full report, including important disclosures and disclaimers, is available at http://www.investrendresearch.com, and at the company's InvestorPower page at http://www.investrend.com/company/list.asp?sPathParam=yes. Investors are advised to read these carefully before investing in the equities of any enrolled company.
Credentials for analyst Ryan C. Fuhrmann, CFA are at http://www.investrend.com/articles/secondlevel.asp?level=238
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