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The chart
at the time of recommendation
NWRE- (Sold on 10/04/07 for a gain of 47%)
BOUGHT
at $11.07 SOLD
at $16.25
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The following is the commentary
subscribers originally received.
On
January 30th Neoware Inc., a provider of thin client computing devices
as well as software that turns PCs into thin clients, reported fiscal
2007 2nd quarter revenue of $23.8 million. This compares to revenue of
$29.3 million in the 2nd quarter of fiscal 2006. However it is up from
the $21.6 million reported in the prior quarter. Non Gaap gross margins
were 43% which compares to 45% in the the year ago quarter and 35% in
the prior quarter. On a Gaap basis net income was 3 cents per share. On
a non-Gaap basis net income was 4 cents per share. The fiscal 2nd
quarter was the first quarter out of the last 4 where there was a
sequential increase in revenue.
In the 1st half of fiscal 2007 a distributor accounted for
10% of total sales. There were no other 10% or greater customers. Also
during this period, sales originating outside the U.S. accounted for
46% of total revenue. During the fiscal 2nd quarter the company added
two new significant enterprise customers. Going forward new products,
product enhancements, and new and recent additions to the sales team
will help drive revenue.
Neoware expects revenue in the 3rd and 4th
quarters of fiscal 2007 to be similar to the level reported in the 2nd
fiscal quarter with potential upside coming from additional purchases
from new and existing large enterprise customers. Inventory levels are
expected to decline in the 3rd fiscal quarter. The company will report
results for its fiscal 3rd quarter on May 1st.
Neoware has cash and short-term investments
worth $108 million or $5.40 per share. Book value has doubled in the
last 2 years and currently stands at $6.87 per share. The company
carries no debt. NWRE has a price-to-sales ratio of 2.2 and a
price-to-book ratio of just 1.6. Yesterday, for the 1st time since
January, the stock crossed above the 50 day moving average. (originally recommended on 4/16/07)
10/04/07-
ACQUIRED BY HEWLETT
PACKARD FOR $16.25 FOR A GAIN OF
47%. DURING THE SAME TIME PERIOD THE
NASDAQ
WAS UP 8%.
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