erg

Hi Sabretooth,
ERG has certainly been on the move in the last week. Nearly a 60% change and the move is UP for a change.
Sabretooth I have read your posts on ERG with some interest. The main reason why I would not buy this stock<< is because of the ticketing system in Melbourne. It is inferior to the London Undergound and it is not really that effective. I have had several tickets not work so have my friends. Often the machines do not work, which is not often their fault, but is a general problem as people vandalize the machines all the time. It would probably be cheaper to just have a conductor on the train to collect and sell fares.>>
This is not a very wise way to look at this stock.
Granted it has disappointed in the past. But I believe thazst now is a buying chance for the following reasons:
(1) The proposed restructure will go ahead
(2) Future contracts are cash flow from Day 1, ie the customer will buy the infrastructure and ERG will do the design, development, and management
(3) The PROTON/ERG combination is recognised as the best technology in AFC/multi-app smartcard applications. A quote from the Northrop Gruman/ERG agreement << As part of the agreement, the two companies are currently bidding together on the contract for the Washington Metropolitan Area Transit Authority (WMATA) Regional Customer Service Centre. The WMATA project calls for the establishment and operation of a smart card customer service centre and the clearing and settling of smart card transactions across all transit agencies in the Northern Virginia, Maryland and Washington DC areas. The WMATA project will start a new era of integrated transit in the greater Washington DC area, allowing passengers to use a single smart card to pay fares across every major transit system in the region.

The combined resources of Northrop Grumman IT and ERG represent a unique set of capabilities for delivering total smart card solutions to US mass transit systems. Northrop Grumman IT is a leading smart card consultant and integrator to the Federal Government. Its parent company, Northrop Grumman, is one of the largest private sector employers in Maryland and Virginia. "We have found that ERG provides an impressive capacity for interoperability and scalability across multiple transit systems and millions of passengers. ERG's open architecture was also very important to us because it will integrate new applications, such as identification and security, as these applications are deployed."

The development of open architecture-based smart card fare collection systems is the first step toward integrating transit with other smart card systems, such as those used in security and identification.

"This teaming agreement for the transit market represents a tremendous opportunity for ERG and a major benefit for transit operators throughout the United States," said Mr Peter Fogarty, Chief Executive of the ERG Group.

(4) > So Sabretooth I have the choice of taking your word or that of Northrop. I am taking the latter
(5) As far as being a toss up…well any investment may be that in the short term
(6) ERG has very level-headed institutional investors involved now