Megadata Corp. (PSSR)

[Vitamin DD]

Look who is the leading percentage gainer....

in the computer software industry for the last 2 months:

http://www.marketwatch.com/tools/industry/focus.asp?bcind_ind=9537&bcind_sid=171599&bcind_pe....

and the last month:

http://www.marketwatch.com/tools/industry/focus.asp?bcind_ind=9537&bcind_sid=171599&bcind_pe....

Not too shabby. : )

I'm not going to cram DD into this one post, however I will make a series of posts through the next week or two to clearly show how undervalued MDTA still is. Comparative analysis is useful to do this, especially because I will show stocks from the same industry (DJ US Softward Index) and focus on market caps of these stocks and then peek at their financials and profile (what they do) compared to MDTA.

The stocks I will select are those within MDTA's industry which have revenue between $0 - $50 million per year, and with low or modest O/S totals much like MDTA.

The first stock used in this analysis is MOSY.

* Mosys Inc. designs, develops, markets and licenses memory technologies used by the semiconductor industry and electronic product manufacturers.

* Their revenue for 2005 = $12,000,000
* They LOST $3,000,000 ($2.98M is the exact NL) in 2005

http://www.marketwatch.com/tools/quotes/financials.asp?symb=mosy&sid=2338755&siteid=mktw

* They have an O/S total of 31,000,000 and a market cap of $217,000,000! They closed Friday at $6.93.


OK, given this let's adjust MOSY's stock price and translate it based on MDTA's revenue and share structure.

MOSY's 2005 revenue is approximately 4 times larger than MDTA's.
-So, $6.94 / 4 = $1.73

However, MDTA's O/S is 7.5 smaller than MOSY's.
-So $1.73 x 7.5 = $12.97

MOSY's bottom line is not good. They are losing 3 million per year while MDTA turned a net profit for the first time this past quarter which was reports in their 10Q. In my opinion the news of the growing customer base for MDTA will only be better received by the market because of their ability to now turn profits. If MOSY is growing their custmer base only to report even larger net losses, how much better will the market respond to the news of MDTA especially if they continue to show profitable quarters?

At $12.97 per share that puts MDTA's market cap at $53 Million based on their 4.1 O/S total. That seems reasonable given what we see in the market that has little or no value, yet show market caps even above $53 Million.

But sports fans, the tradable float for MDTA is under 700,000 shares! So what does that mean? Who knows, but it sure is a formula for something very good.

Please note that this type is DD is NOT being brought to forecast an exact price where MDTA should be trading. The market will determine this. The DD I'm bringing to the boards simply points to the opportunity that exists as news keeps coming, good quarters keep rolling in and more investors buy into this beauty.

PR's and filings showing additional promise and value will demonstrate one of the purest supply and demand type reactions you'll see out there. Those holding the tiny float will be rewarded because if the value and share structure continue to support a much higher price, the market will have no problem moving the price to those levels in effort to facilitate trades for eager buyers.

Hoping everyone has a good first week of fall!

Vitamin DD