Registered User
Joined: 2/23/2006
Posts: 102
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I'm at yellow status on the markets so it I was challenged for my first pick after all the hype. I posted on the 'ACI' post about energy and I just can't recommend them even after a killer day. Sticking to core principles: one stock and why, in depth. If each participant starts their their own thread with the SOTW (stock of the week) prefix, we can go respond without confusing each other.
I've been on this story since a great analysis by sha9999 in late Dec. We're both doing some security analysis on this one as there is no coverage on this one at all. Purely on spec but here goes:
ClickSoftware Technologies makes software for service scheduling, better known as workforce optimization. And apparently its a hit. Customer adds in the latest qtr include Geek squad, Deutsche Telekom, PG&E and others. It seems these guys are in the zone right now. They turned to a profit in the 3rd qtr (Sept) with .03. Their gross margin is 59% and improving recently, in the range with most software/consulting providers. It seems not unreasonable they could even do as much as $6mm in software and $6mm in services for the qtr vs 4 and 5 roughly 3rd qtr. This at a 60%GP and std Opex could result in .10 for the qtr and have people thinking .50 or more for '07. Unfortunately, the stock seems to have some followers that understand this. It reports wed 2/7 before the bell.
It has moved with conviction from under $2 this summer and only getting stronger. As an aside, lately I've been forcing myself to enter strength for strengths sake instead of taking contrary, bottom fishing, seeing the divergence that isn't there trade. Doing so is a form of arrogance. Thinking I know better than the market the value of a stock. With caution applied, this is my therapy.
Technically, I see no indicators leading or lagging this one. Just strength. BOP has regained 100 after the recent breakout at 3.62 and more importantly, MS has gone to a newer high than even december. The stock has been higher. In '04 in touched 5. But if it continues its uptrend, it will soon be in "clean air".
The numbers:
Market Cap (intraday):111.10M
Price/Sales (ttm):3.63
Price/Book (mrq):9.43
Revenue (ttm):28.97M
Qtrly Revenue Growth (yoy):42.20%
Total Debt (mrq): 0
Average Volume (3 month)3:257,682
Shares Outstanding:27.77M
Float:20.11M
% Held by Institutions4:30.70%
Shares Short (as of 09-Jan-07)3:97.63K
It would be nice if CKSW retested its breakout at ~3.60, but as I like to remind myself: "the best don't retest".
There is risk here, but I'd say its biased to the upside from 3.85 which is my rec entry point from 7 day trend. Back it up if it gets into what is now support at 3.30-3.60(before report of course). Stops will have to be loose IMO.
This is a swing trade for me with a decent initial goal of 5.05 close to '04 high of 5.28.
Anyway, there it is. Kudos to sha9999 for tip.
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