2210 GMT [Dow Jones] Canaccord Genuity starts Infomedia (IFM.AU) at buy with a A$1.50/share price target, saying the business has several major advantages over other software stocks. Infomedia sells data services to car dealerships' parts and servicing departments. Infomedia therefore benefits from high barriers to entry, as most automotive manufacturers sell exclusive licenses of their vehicle data, the broker says. Also, the parts and services departments typically generate 35-40% of a dealership's gross profit, but have historically been poorly run, Canaccord says. That opens the door to Infomedia to sell products that can boost profits. "In our view, the Infomedia story offers exposure to a high-quality company, with a solid earnings growth profile--through increasing the subscriber base, coupled with strong operating leverage," analyst Tim Plumbe says. IFM last traded at A$1.19. ([email protected]; @dwinningWSJ)
From the DJ news desk. FYI. DYOR.
IFM Price at posting:
$1.24 Sentiment: Buy Disclosure: Held
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