Zeev's Turnips Patch-No Politics (ZEEV)

[jjkool_01]

CADA: Cam Commerce Solutions; DD, links, comments

Current price: $17.55
Target: 3-9 months $23.50

Debt: $0
Cash: $16.2M

3.2M float
15% insider ownership
25% institutional ownership


Comments: This company’s growth will come from X-Charge product. This product in summary is credit card processing services software. X-Charge also supports various check authorization platforms. Through the use of a standard driver's license, X-Charge allows the merchant to participate in Check Guarantee, Check Verification, and Check Recovery services.

http://www.camcommerce.com/prod_xcharge.htm

System sales have been flat and may continue so however significant new release of both Retail STAR and CAM-32 systems this quarter that will provide some new functionality that has the potential to expand the market opportunities for system sales.

Again, my opinion on the growth of the company is that the growth and strong profit margins will come from X-Charge.

So how is X-Charge doing? From earnings report for Q ending Dec. 31, 2004 ‘X-Charge’ revenue increased 104% over the same quarter last year.
$1,397,000 from $684,000
From previous Q X-Charge revenue growth was 31%

See the growth? This is just now really taking off for the company.

How this translates into earnings:
Pre-tax income for the three months ended December 31, 2004 increased 67% to $673,000, compared to $404,000 for the quarter ended December 31, 2003.

In the first quarter the company achieved a record pre-tax profit margin of approximately 11%, which is primarily the result of the continuing trend of a higher mix of revenues being X-Charge related.

As for ‘Net-income’:
Net income for the three months ended December 31, 2004 was $402,000 or $0.10 per fully diluted share, compared to $375,000 or $0.10 per fully diluted share for the quarter ended December 31, 2003. In the first quarter of fiscal 2003, the Company did not incur any federal income tax provision due to the use of net operating loss carry forward’s, while the fiscal 2004 results reflect the impact of a tax provision at federal statutory tax rates. In addition, the number of shares used in the computations of basic and diluted net income per share is higher this year than last year primarily due to a higher share price, and stock options and warrants that were exercised over the past year, resulting in no change in earnings per share on slightly better net income for 2005.

So net income only grew at 7% because of taxes compared to prior year.
The appearance of small net income growth with earnings per share being $0.10 vs. $0.10 the year prior caused some low volume minor selling when the quarterly earnings was released a few days ago. In my opinion, the savvy investors have either sat on their current positions or used this opportunity to increase their positions.


In summary, I think this stock price has the potential to move up by 30%+ during the next few quarters. As institutions and more astute investors catch on the growth story here, the small float and current valuation should allow for a nice return on investments.

http://www.camcommerce.com/top_index.htm

http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000819334&owner=include


I am just an amateur so do your own research and make your own decisions.