altium - bottoming out, page-2

I have been following this stock with a view of buying in for some time. I tend to be cauticious at this time due to the stupidity in the world(Pakistan/India) I do agree with you that it looks like it may be bottoming out. However in saying this I took another good look at the companies revenue and sales.

ALU is a global developer / supplier of electronic design automation (EDA) software for the Microsoft Windows environment. EDA software reduces the time-to-market for electronic products by aiding the task of designing, analysing and testing electronic products. ALU`s products are used in industries including telecommunications, consumer electronics, & automotive.

The key market here is North America. With IT spending down and companies looking further at cost reductions, Altium may find it difficult to meet its forecasts.

ALU operates in the North American (58% FY01E sales), European (17% sales), Japanese (8% sales), and Australian (3% sales) markets.

Looking at the "Revised Revenue forcasts" annoucement on 11 April.

"Although January and February performance was good, our March figures were below expectations due in part to the cautious progression of the economy. Companies have budgets to spend, but purchasing decisions are being put on hold as companies wait to see if the growth of their own business will remain constant. We expect this caution to continue in the short term, although there are some early signs of positive movements. Our experience is shared with a number of other global technology companies who have recently
announced revised results due to cautious economic conditions"

"Looking forward, Altium expects the 2002/2003 financial year to see revenue growth rates of 40-50%, as experienced by the Company in the five consecutive years to the end of 2000/01. With after tax profit
margins of 20%, strong profitability is also expected."

I like this company and believe with a pick up in the North American market, it will drive the shareprice. However I dont see this happening in the short/medium term with the markest driven by 'stability' of the World and IT spending unlikely to reach previous highs in the 90's. Throw in also that TAX selling is likely to hit this stock.

Cheers
mycall101
my opinion only. Do not own shares