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Project Group
(OTC BB: PJTG) - Turning Enterprise Software Growth Into Profits For You |
|
Do you understand what Enterprise
Software is? I constantly hear the phrase, but no one ever clearly
defined it for me.
Enterprise Software is designed
to run entire businesses. In the corporate world, there are two basic types
of software applications: personal productivity solutions which include
word processors and spreadsheets, and enterprise class solutions,
which automate business processes. Another words, enterprise software integrates
all the individual software components of running a company into one massive,
hopefully seamless system.
German company SAP developed
the first Enterprise Resource Planning (ERP) applications.
It was designed to bring together a company's disparate transactional data
processes. For example, when a customer purchase order is entered in the
sales department system, the warehouse is automatically alerted to prepare
the order, the inventory updated and the account system is adjusted accordingly.
Jupiter Media Metrix estimates the
North American market for enterprise software applications and related
services sold to small and midsize businesses alone was about $1 billion
in 2001. It is expected to grow to $3.4 billion by 2006.
 |
Enter
Mr. Softy |
 |
As enterprise software solutions
began to grow, cash cow Microsoft (MR. Softy) was late to the party.
Not wanting to be left behind, Microsoft used it's immense cash
resources to gain market share rapidly. In April of 2001 Microsoft
bought Great Plains Software, which provided Mr. Softy a huge footprint
in the US market. In July of 2002 Microsoft bought Navision (with
34,000 client company installations), one of the leading enterprise software
companies in Europe.
While enterprise software is only
the fourth or fifth largest segment of Microsoft's business, it is the
fastest growing. Enterprise software sales grew 84% in 2002 at Microsoft.
Estimates have it at about $600 million in 2003, surging to $1
billion in 2004. Mr. Softy delivers about $34 billion in annual sales.
The growth rate is exciting, and
therefore a good target for investable dollars looking for higher returns.
As an investor, how do you take advantage of the extraordinary growth?
- buy Microsoft and watch it go up 7% over the next year? Not with my high
risk/ high return capital. You find smaller peripheral companies that will
enjoy extraordinary growth rates by hitching on to Mr. Softy's speeding
train. That's where exceptional returns will be found.
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The
Project Group- Sells and Integrates for Microsoft |
|
Did you know that Microsoft does
not provide integration services for its software packages? They tried
to, and discovered they weren't good at it. They just write the software,
package it up, and sell it. They use partner companies to integrate and
implement the highly complex Enterprise Software solutions tailored to
meet the needs of medium to large companies.
Enter the Project Group. Sporting
the enviable Microsoft Gold Certified Partner status, the Project Group
is rapidly growing into one of the world's leading integrators of
Microsoft Project Software. Year to date at the end of September, sales
at Project Group were up 40% year over year despite a weak
third quarter. Management informs me the fourth quarter will be the best
in the company's history, and the company will likely be cash flow positive.
I anticipate their growth rate will accelerate rapidly in 2004.
Microsoft pays this company
to handle the sales of their Enterprise software, and then the customer
pays them to consult and manage the integration process.
Here's a list of their current customer
base:
-
Microsoft
-
WalMart
-
Waste Management
-
Occidental Petroleum
-
Haliburton
-
Electronic Data Systems
-
Cooper Cameron
-
Tetra Technology
-
Solvay S.A.
-
Texas Industries
-
Dell Computer
Since June of this year, the company
has landed multiple new assignments, and opened regional offices on the
East Coast and in the Pacific Northwest.
|
Trading
Alert on Project Group (OTC BB: PJTG) |
|
The Project Group has experienced
the normal growing pains associated with the demands of rapid growth. The
balance sheet needs improvement, and the September quarter was lackluster
due to new contract delays.
On a go forward basis the company
looks very exciting. According to CEO Craig Crawford, the Project Group
has booked enough business for the December quarter to generate more than
double September quarter revenues, and approach the $1 million mark for
the first time in corporate history.
Management at Project Group
me informed they have a high level of confidence in their future business
bookings. In early December they plan to make a public projection for revenues
and earnings looking out to 2004 and 2005.
The company sports an $8.25 million
market cap. The intangibles of the Microsoft Gold Certified Partner Status
and the customer base alone are probably worth that much. Throw in the
company's unknown status and accelerating growth, and you have the ingredients
for a potential win of the magnitude we've had with VirTra Systems (OTC
BB: VTSI).
The trading history is limited. The
stock split 2:1 in October. The blue line is the 50 day moving average,
a good short term indicator of market direction. As you can see, the stock
made a nice move in October, and has since retreated. It should now turn
back up off the 50 dma.
The company came out with a news
release just after the market closed on Friday. The company announced it
had been retained to handle the Microsoft Project 2003 integration
for three new client companies: Cooper Cameron, Tetra Technology and
Solvay S.A.
These guys have momentum, and it
will continue as IT spending recovers.
Here are my thoughts:
-
Buy up to $.20
-
Short Term Price Target (December):
$.25- Longer Term- wait for sales and earnings projections in December
for a prediction.
-
Stop Loss: $.11 (end of October low),
or whatever your risk tolerance.
Every time you see one of the new goofy
Microsoft
commercials for Project Management Software, think of
The Project Group.
Here is the complete text of Friday's
news release for your review:
| Press Release Source:
The Project Group Inc.
Microsoft Engages
the Project Group to Lead Implementation
Friday November 21, 4:05
pm ET
Microsoft Project
2003 to be Implemented at Cooper Cameron, Tetra Technology and Solvay S.A.
HOUSTON--(BUSINESS WIRE)--Nov.
21, 2003--Microsoft Project 2003 is to be Implemented at Cooper Cameron,
Tetra Technology and Solvay S.A. Microsoft has engaged the Project Group
(OTCBB:PJTG - News) of Houston, to lead the implementation for these companies.
The announcement was made by Craig Crawford, the Project Group's president
and chief executive officer.
"We believe the Project
Group has received significant and continual validation of its capabilities
from some of the world's top corporations," stated Mr. Crawford. "Our expertise
has been clearly proven and is now employed by Fortune 1000 clients which
include such prestigious companies as Wal-Mart, Microsoft Corporation,
and Halliburton." Mr. Crawford went on to say, "Microsoft has identified
MS Project as a billion dollar market and has continued to identify The
Project Group as a major integrator of this complex software. We are enormously
pleased to be part of such an illustrious and expanding collection of world
class companies."
About The Project Group
The Project Group Inc.,
a Microsoft Gold Certified Partner, provides project management advisory
services, implementation services, configuration, custom programming and
other related products and services using its proprietary methods in accomplishing
assignments. The Project Group has provided its expertise to the Fortune
1000 including Waste Management (WMI), Microsoft (MSFT) and Texas Industries
Inc. (TXI). PJTG, headquartered in Houston, was founded in 2001 by senior
project managers with broad Fortune 1000 project experience. PJTG focuses
on providing enterprise based project management solutions and improving
project schedule and budget performance for its customers throughout the
United States and world.
This press release contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Investors are cautioned that these forward-looking
statements involve uncertainties and risks that could cause actual performance
and results of operations to differ materially from those anticipated by
these statements. These risks and uncertainties include issues related
to the ability to: obtain sufficient funding to continue operations, maintain
adequate cash flow, profitably exploit new opportunities, and the unpredictable
nature of business risks; as well as other factors set forth in the Company's
most recently filed Form 10 reports. The forward-looking statements contained
herein represent the Company's judgment as of the date of this release
and it cautions readers not to place undue reliance on such statements.
The Company assumes no obligation to update the statements contained in
this release.
--------------------------------------------------------------------------------
Contact:
Trilogy Capital Partners Inc.
Racquel Rivera, 800-330-6540
[email protected]
--------------------------------------------------------------------------------
Source: The Project
Group Inc. |
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