Here are my personal thoughts on Sonic Foundry (all IMHO) as of today.
Sales growth from quarter to quarter has been very encouraging. SOFO continue to improve on many different levels.
SOFO is no longer just a “hardware” company. They now are incurring services revenue that is also growing nicely but need to continue.
Valuation play. I feel that the market capitalization for SOFO today (30-40 Million) is very appealing. With the estimated growth rate that SOFO management foresees and has discussed on their recent quarterly update, I continue to believe the future of SOFO is very positive.
Management reiterated recently that they still expect to reach $15 Million in sales for 2006. They had a chance recently to revise these numbers down after a “slow” first quarter, but instead made comments alluding to tremendous growth/project prospects in the upcoming quarters.
I like Mediasite. It is a very simple tool and I believe has tremendous long term value as more individual in the Educational and Government market segments. I believe the other market of tremendous growth lie outside the US territories.
The recent “insider” purchasing by the CEO I believe is a strong positive sign of things to come. I am a simple Midwest individual. A personal investment of $100,000 is a lot of money, at least to my thinking.
If you look at the % amount of insider ownership, they own I believe 17%. Another 22% of the shares are held by Institutional & Mutual Fund Owners. Neither of these groups has sold one share.
Longer term, 12-36 months out, I see SOFO as a strong buyout candidate. The value attached to the buyout is uncertain at this juncture, all depends on how well their sales and service contracts grow and the acceptance of www.MediaSite.com
RW
