Forum Archive Index - March 2001

["Ben Dutton" <bendutton@sharechat.co.nz>]

Greg, just a couple of points on SMR and ITC.

 

ITC have a war chest of about $17 million to make future investments. 

 

SMR are "fully invested".  In July last year they had only $1.7 million in cash.  The only way SMR can raise more money is by selling some of their Commsoft shares, getting a loan, or having a rights issue/share placement.  The last two options are, considering the current market sentiment surrounding the tech sector, unlikely.

 

Selling some of their Commsoft shares would have been a good idea when CSG was trading in the $1.50-$2.00 band.  But now that CSG is now trading at 18 cents, their investment is not worth nearly as much as it used to be.

 

ITC have, on the whole, provided the market with a fair amount of information on their investments.  SMR has not been as forthcoming with information.  We do not know how well their companies are actually performing.

 

You also have to remember that SMR made most of its investments at the height of the dot.com boom, most probably at valuations much higher than what venture capitalists are paying nowadays.

 

ITC didn't fall into this trap and now can pick through the rubble, making good, cheap investments into companies with a promising future.

 

Some of these reasons may explain why investors are treating the two companies differently.  For more info on Strathmore, check out this ShareChat Special Report:

 

http://www.sharechat.co.nz/articles/20010222-SMRfeature.shtml

 

I'm keenly waiting for Strathmore's next set of results which should be due out shortly.  After checking those out, I think investors will be in a better position to judge the company and its future potential.

 

John raised some good questions today on ITC as well - questions that I don't know the answer to  .

 

Whatever happens with these two companies, it's looking like 2001 will be a watershed year for many of our tech companies.  Interesting times ahead indeed.

 

Best Regards

 

Ben Dutton

(Disc. do not hold ITC or SMR or CSG)

 

 

----- Original Message -----

From: Greg McDonald

To: sharechat@sharechat.co.nz

Sent: Tuesday, March 27, 2001 6:14 PM

Subject: [sharechat] ITC-cheap??-LOOK at SMR!!!!!!!

People have been talking about how incredibly cheap ITC is of recent times.

When you compare ITC and SMR their fundamentals are almost identical for their last results-both NTA-15.5cps and 2.6cps in earnings.

IMHO SMR are set for a great "rocket" increase in share price !!!!

Currently 7cps (ITC-18cps)

Any views?????