I've written before about the references to FCT made by Market Matters in their daily report and their upbeat tone.
Today they had this to say about FirstWave as reported on Livewire:
FirstWave has a market capitalisation of ~$60m – so it’s small, however, it’s pipeline of growth looks substantial. Where in the past, corporations would run applications or programs from software downloaded onto a physical computer or server in their building, cloud computing allows access to the same kinds of applications through the internet. For instance, if you update Facebook, you’re using the cloud, checking your bank balance, you’re in the cloud again. In short, most businesses are starting to use cloud computing, and the scope of usage is expanding dramatically. It’s easier to be in the cloud because it’s more flexible, it’s typically cheaper, allows for remote access to applications, more collaboration, automatic updates and the list goes on. One of the main concerns, however, comes from security. How do businesses ensure the data, the application, the IP stored in the cloud is safe? They need a cloud based security solution, and this is what FCT has. For a business like FCT however, the biggest hurdle, once the solution is developed is selling it.
FCT’s solution was developed in partnership with Telstra Research Laboratories and this, in turn, has meant that FirstWave has been able to integrate its security application into the Telstra Network. This partnership generates revenue now, however, is expected to generate significantly more into the future as the Telstra sales force is incentivised to roll out Telstra’s cloud applications. FCTs security solution is embedded in these applications, and they earn a fee per user. Yesterday, FCT announced strong revenue growth from this partnership with the company well ahead of milestones they articulated to us when we met.
This is a small growth company; that is on track to be cash flow positive towards the end of this financial year – if not sooner. We can buy FCT ~50c with stops under 44c.
FCT Price at posting:
49.5¢ Sentiment: Buy Disclosure: Held
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