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Onvia Inc. Message Board

  • fivemilx35 fivemilx35 Dec 3, 2003 7:51 AM Flag

    The Prudent Speculator

    Oh, the poor fools who sold yesterday. The Prudent Speculator touted ONVI in last nights newsletter. For those of you who don't know, TPS has been the number 1 investing newsletter over the last 20 years. His recommendation from last month was NVDA just before it popped and the month before it was CKCM at $1.50 and it now trades at $8.35. Get ready to watch this puppy fly. IMHO

    Tonight's Hotline Special is first-time recommendation (ONVI - $4.33). Onvia helps businesses secure government contracts and government agencies find suppliers online. The company assists businesses identifying and responding to bid opportunities from more than 50,000 government purchasing offices in the $600 billion federal, state, and local marketplace. Onvia's service makes it more efficient for companies of all sizes and industries to access and compete for these government opportunities. Businesses no longer have to search newspapers, trade periodicals or the Internet for government opportunities. Customers are automatically notified of and updated on government opportunities that match their business profile.

    Onvia's third quarter results, released a few weeks ago, continued to show improvement. Revenue climbed to $2.6 million compared to $1.8 million in the year ago quarter. Net loss decreased to $0.17 per share as opposed to a loss last year of $0.41 per share. Chairman and CEO Mike Pickett said of the results, "While I am pleased with the company's ability to continue to reduce its cash burn I am not satisfied with the rate of improvement. We have taken actions to hire new sales management and additional sales staff, and to expand our vertical coverage and offer new products to increase cash receipts and further reduce our cash burn in 2004."

    President and Chief Operating Officer Clayton Lewis noted some positive trends, including an increase in average subscription price, to $505 from $310 last year, while he said the company published 155,000 new government leads in the third quarter, up from 77,000 leads in last year's third quarter. He also said Onvia added 11 new agencies in the quarter, with the city of Tampa marking the company's 120th agency in the state of Florida.

    While Onvia has much to do as it works its way towards profitability, we can't help but be excited by its prospects. Of course, not surprisingly, the real reason we're recommending the stock is because it is yet another 'Cash is King' play, with the current $4.38 per share of cash on the balance sheet currently more than the price of the stock. Onvia also has no long-term debt and a current ratio approaching four to one. Even though it trades for a hefty 3.4 times sales, it is priced right near book value. It seems as the market is valuing what appears to be a business with considerable upside at less than zero. We love it when that happens! Our Fundamental Goal Price for the thinly-traded ONVI shares is $8.80 and our buy limit is $4.40. We do advise limit orders on this one!

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4.80+4.80(-100.00%)Oct 25 12:52 PMEDT