I think Cyber is a great company, too, but so are
KEA and CHRZ which basically do the same thing. From
the point CBR is at now, CHRZ proceeded to fall to 11
1/2 while having basically the same fundamentals
regarding changeover from Y2K revenues to other revenues.
These companies have substantial liabilty in regards to
their y2K remediation. CBR is a relatively small
company and regardless of the merit of any suits, the
legal bills incurred in addressing these suits can be
substantial. The mutual funds are pulling out of these stocks
because it is uncertain that the lower margin revenues
going forward will result in the profit growth of the
I'd go with CHRZ instead of CBR because
it is has already been pummeled on these fears.
CBR's fall may have only started. Take a look at CHRZ
chart to see what it did after it hit 20. Scarey.
Book Value of an organization has nothing to do
with what it may be valued at to a prospective buyer.
Asset (and liabilities) can be greatly over/under
stated based on various accounting methods (i.e.
historical cost - particularly if you have hard assets like
land/buildings that appreciate or intagible assets like software
that may be incredibly more valueable than the cost to
develop). Also, things like Corporate growth rate and a
buyers potential synergies/economies of scale can
account for a Company's Market Cap premium compared to
it's book value.
Personnally, I think Ciber has
been killed with a flight to quality/size in the
technology sector. Buyers are shying away from the smaller
tech stocks. It's not as complicated as y'all think!
Good summary of the
One number in CHRZ's favor that you sis not comment
on is their higher net profit margin. 8% for CHRZ vs
7% for CBR.
That seems a significant
advantage for CHRZ.
Size is important and on that
CBR seems better.
I have owned CBR but am now
We will see in time who performs
best. They are both fine companies IMHO.
Pretty much, at least I hope I'm on the right
track, If you have reason to think I'm wrong please give
me a concrete example.
However, in trying to
write these things on the fly and using my limited
resources and time, I sometimes don't say things as exactly
as I would like.
book value is the actual equity of the company and is
an indicator of the value of the company to a
potential purchaser, insurance agent and/or lender. Book
value will not change so fast as it depends on things
like asset/liability ratios, purchases/sales of
capital equipment etc."
I mistakenly used the word
"equity" instead of value. Book value would be more
accurately (from the top of my head rather than out of a
reference book). The capital invested into a company minus
it depreciation and amortization. Much like the
common "Blue Book" value for a car. You buy a car for
10K and then 5 years later its worth say 4K. The 4K
would be the book value. Its much the same for a
company, except more complicated because capital is
continually being invested and depreciated and sold etc. It
therefore can be used as a "loose" indicator of the
monetary value of a company...
"The book value is the actual equity of the
company and is an indicator of the value of the company
to a potential purchaser, insurance agent and/or
lender. Book value will not change so fast as it depends
on things like asset/liability ratios,
purchases/sales of capital equipment etc."
are you sure
you know what you're talking about? (couldn't read
all your post)
These two companies do not do substantially the
While only 5% of Cibers revenues
are Y2k related, CHRZ's % is much higher. I know: I
own both stocks. Lucky me!
Ciber is much more
diversified and is a much more dependable company. Stick with
Ciber....but look long term.
Hi Supercbr -
You had posted earlier that
you thought CBR was superior to CHRZ.
I wanted to
let you know the comments I received from CHRZ and
then I'd like to hear your comments on your view of
the two companies and how they compare.
says they stick by their earnings projections and that
they project 22 to 25% top line growth in 99 and that
Y2K will drop to considerably below 10%. Staffing
solutions are projected to grow 40% from the 334mil in 98.
Their other sector - high margin e-business is
projected to double to 100mil. They project a short term
decline in margins of less than 2% which should last only
through the first half of the year. They have initiated a
10% buyback, as you probably know. They say they
began to replace Y2K revenue months ago. They have been
in business a long time and has navigated through
crises before and done well. With a PE of 8 and 25%
growth rate projected to return to higher levels by
year-end, CHRZ seemed to me to be the better investment
choice of the two.
OK - Your turn
Could you let me hear why you view CBR as the better
choice. Also, I have to admit I'm certainly not involved
in the IT business and although I have talked to the
companies, read all the info I can find on the net and
researched the financials of the two companies, I don't have
other information which you may have.
your comments - or anyone else's
I think we have seen what happens with CBR as it
already tested levels below 20. The support seems to be
there. After companies deal with and see the end of
their Y2K problems they will begin putting money into
software consultancy again and we will climb to more
realistic values. So this may take awhile but those of us
with patience should be rewarded. If we see the dip
down to the 17 level again I for one will do some
buying as I didn't the last time we got the dip.
I guess that you did not realize that CBR has
only 5% of its revenues linked to Y2K unlike other
companies like KEA MAST and CHRZ. These stocks are making
new lows every day and that is not the case with CBR.
It bounced back at 18 and closed over 20 in a few
days with good volume. It may pause for a few days
before it goes up. I guess it gave a chance for guys
that do not beleave in value and does not understand
the companies business to get out. I guess CBR cannot
be lumped with other Y2K companies.
Actually, I have recently spoken to the company
(CHRZ) and their Y2K revenues had dropped to under 10%
at the end of the last quarter and are in the range
of 5 to 7% at this point. I would love to see all of
these companies valued according to our feelings of how
they should be valued, but after having watched the
continuing decline in KEA and CHRZ, I decided to wait to add
to my position. Nobody thought CHRZ would continue
to drop after it hit 17 and look at it now. Just a
word of caution to others. I wonder if the big boys
know something we don't. I see no difference between
the work done by these companies.