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Magic Software Enterprises Ltd. Message Board

  • theprofitman1 theprofitman1 Nov 3, 2010 1:04 PM Flag

    I know this stock for years

    it always fails

    be careful!!!

    if you have profits, sell ASAP

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    • Profit,

      Magic's chart since 1990 reflects your point regarding boom and bust cyclea in Magic's share price.

      Since Guy Bernstein became MGIC"s chairman in 2008, however, revenues, profits, cash flow have all climbed steadily and impressively. The share price surged from $2 to $9 in 2010. In hindsight the NASDAQ herd, not for the first time in history, overcorrected on the upside.

      Rather than selling ASAP, I've continued adding shares below $5. In my opinion the company's P/S ratio, enterprise value, cash flow and revenue growth all point toward an intrinsic value higher than $4.50.

      Whether Magic shares return to the $9 level or not will depend on whether its new product initiatives, including the mobility solutions and MS interface, gain traction or not. MGIC's existing solutions, customer base and cash flow, however, is a solid business foundation that, in my opinion, should limit the downside risk.

      I remain a Guy Bernstein fan. Many micro caps I study suffer from tepid, go-with-the-flow leadership at the CEO and/or Board level. Bernstein's sharp business focus and fiscal discipline are evident not only at Magic but also steady profitability, revenue growth and positive cash flow at Sapiens and Matrix.

      Magic also seems to have a very passionate and committed leadership team and staff. In the long run strong teams win games.

      Let's check back in 24 months. If Magic is languishing at or below $5 then your warning will have proven more accurate than my optimism. If Magic is trading above $8 a share, as I think it will be, I'll have reason to smile.

      Good luck to everyone.


    • what stock

    • There are some stocks that cannot hang on to their gains. Any good news and it goes up a little, but then retraces back. The upward move for MGIC in the last several weeks has been unprecedented out of the ordinary.

      now its time to give back the gains. It may be a buy in the 2.75 area though in the next few days

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