There is nothing wrong with Actuate as a company. They have a nice application business, specializing in reporting software. The problem here is the stock price. ACTU looked great not long ago, when the shares traded about $2.50. Here at almost $4 per share it is a different story. The only way ACTU going higher from here makes sense is if we have a booming Nas Small Cap rally (unlikely) or if ACTU's business suddenly starts showing dramatic growth (also unlilely). At the recent Q2 report and conference call management reiterated full year guidance of about $120 to $122 annual revenues. That is nice and solid but nothing earth shattering, especially when you factor in inherited Performancesoft revs of about $10 million annual. I think ACTU management knows that the numbers they are doing isn't going to boost the stock price. Consequently, they crafted that story during the CC about how next year they don't know how much BIRT-related sales they will get so they have decided to not offer forward revenue guidance for 2007. That fooled nobody. I think their logic was to try and create some speculation that BIRT is so big it will mean the downloaders will naturally start buying Actuate applications left and right and reinvent the company. As far as I know BIRT related Actuate sales have been immaterial to date, and I see no reason why next year all of a sudden BIRT related sales will signifcantly materialize. ACTU management's desire was to appear mysterious and create a buzz, but they're not Steve Jobs. Instead what they did was come off cheesy and tentative. They came off like guys afraid to say that the company's organic growth is about ten to twelve percent annual. My opinion is that the "mystery" they're trying to create with the "no forward guidance because of BIRT's potential" is just a cheap way of management trying to keep some buyers interested in the stock. They will deal with the reality next year.
Actually I have been a basher of Actuate in the past as I know their exec. mgmt. team and how they focus on themselves. However they are motivated to get the stock price up and the PS acq. was a good thing. Not a lot of companies are growing organically so if you buy growth, there is nothing wrong with it.
Their forward PE is 12, they have to continue to hit their forecasts. With all of this said, I think it is a great buy at 3.70 and bought 15,000 shares today.
ACTU is holding back on 2007 guidance, for a very good reason.....But, they will not hold back on worthy " News" & some of what's happening.....After all,wouldn't you want the " cat in the bag",before you told everybody, how you caught the cat....common sense,here , That is what I would do....Get it Locked up.........This will work out very well...ACTU will be a classic textbook Wall Street story....Hold tight to the Fun-da-mentals,because ACTU has the right plan, going forward, for these ,"Times".........& Smooth...Glad to see you & your opinion back....RingCircleOfTrust......To Health....
Yes, not giving guidance because of BIRT, which has not generated any income yet is like telling grown ups about Santa who will bring them a load of money by next year. I do not expect any mature person to accept that kind of logic.
ACTU revenue without performancesoft has been flat in past few years. Its license revenue has been worse. I see no or little growth. Margin is getting smaller and the sector is not doing well either while competition is arising from everywhere.
On the other hand, ARTG (Software Company) is expanding its business since more people use on line to shop. Some investors may have used ARTG software without knowing it. For example, if you bought a DELL computer on line then you probably used ARTG software. How about Best Buy, Target or OfficeMax. Customers include Yahoo, Microsoft, HP, Adobe, Intuit, At&T, Verisign, Nokia, Pepsi, Direct TV and many many others.
ARTG has doubled its license revenue since last year. ARTG license revenue now is about the same as ACTU; however, it may double it again by next year.
Customers can buy the license or use it as per demand or per click, or pay fix monthly payment. ARTG put a lot of money in R&D and new software with new features is in way.