If the average daily volume is 192K, the stock
should be moving much more quickly. The is the slowest
day I've seen for ANLT since I started following (and
Is something about to
The fact that the academics may say the going
rate for individuals with GIS/Remote Sensing
experience is $45K to $50K is strictly their opinion. In
practice the starting pay is much less with just a
bachelor degree. I agree that the demand is there but the
going rate is much less. Visit the GIS Jobs
Clearinghouse to get a realistic idea of how much companies are
willing to pay their new employees.
The bottlenecking effect in
my opinion is occuring on both
Customers knows the potential as well as the benefits of
spatial technologies. But in the world of downsizing
(both private companies and govt sec.) they are
hesitating but very interested. The last time I attended a
GIS conferrence, majority of the people attending
were govt. sponsered and private companies from
"utility" related business such as cable, power, etc as
well as real estate and developers. (the academics
sectors were there too) The responses that I got from
these attendees....Potential users... were that they
are have a tough time understanding this "GIS" thing.
But they see the benefits.
My opinion..... this
country has a spatial problem. We have live in a world
that takes space for granted and now we have
difficulty understanding space.
From the ANLT's end,
I think the Indian purchase answers your question.
There is a REAL need for geographers or people with gis
background. Starting pay for such people (undergrad with some
understanding of gis) was about 45-50K. Students with gis
experience...easily 60K. The demand for gis personels is greater than
the supply. One way of finding out is to call your
local university and find out from the registra which
dept. teaches the gis courses. Then find out from the
instructors how popular their classes has been.
not have answered your question. But I am trying to
assure you that overtime, things will work out when the
technology becomes less pure play... meaning.....when
everyone start interpreting the infomation on their
drivers license as a base for geocoding, then people
understand what gis is all about. In other words, the data
is already there. People just need to intrepret it
spatially. when that happens, then gis becomes "mainstream"
...ANLT investor makes money. There!
I still don't
think I answered your q. Sorry I tried.
Average EPS growth over last 5 years hase been
50% not 60%. This reduces the projected best case
price for the next 12-15 months to 71 from 93. So the
range resulting from my previous calculations should be
40-70, not 40-90.
Sorry for the
there is more than a wild guess
that we will see additional
acquisitions. If these
buys are made with the same care as the two most
recent ones, ...we should see this stock back over the
$40 level sometime over the next 12 to 15
Internal growth is about 30%. If we extrapolate this 30%
growth from 3/31/98 to 6/30/99 we obtain 1.19 = 0.86 x
(1.3)^1.25. For a price of 40, this gives a P/E of
At present this stock is trading in the high 20's,
which corresponds to a P/E of ~33 (= 28.5/0.86), right
about the same. Therefore I suggest that a price of 40
can be reached in 12-15 months entirely on the
internal growth rate of 30%.
Now, if aquisitions
are added into the picture, one would expect an
average growth rate higher than 30%. A BEST CASE
assumption would be that the past record of 60% average EPS
growth over the past 5 years would be achieved, "if
these buys are made with the same care as the two most
In this case, the EPS for 6/30/99
would be 1.55. Also, the higher EPS growth rate would
justify a higher P/E than 33, more like 60, in accordance
with the 60% growth rate. These assumptions project to
a price of 93.
Thus, I would suggest that,
depending on what actually happens, the price 12-15 months
out could range from a low of about 40 to a high of
I am still seeking confirmation of an opinion
posted here several weeks ago, to the effect that the
main bottleneck to working off backlog lies with the
customers, rather than ANLT's capacity. Anybody?
Thanks, TL, for your excellent summary. I think
your conclusions are right on the money.
belief is that ANLT can sustain => 25% annual
internal growth. It is on this basis that I bought the
shares, and sold when valuation became extreme. I view
the MSE "acquisition" (merger, really) as exceptional
(and nicely done). I don't think we can realistically
count on this kind of highly accretive deal repeating
consistently. May be one of a kind.
Also I think ANLT's
plate is pretty full right now, so it's fine with me if
they concentrate on what they've got (that's where
Interra comes in) for now.
...management has made it clear that being a consolidator is
part of ANLT's core strategy. As GryCrayon notes, they
can leverage their proprietary software to advantage.
Bottom line for me is that acquisitions will likely
continue to juice nice internal growth. While there may or
may not be more MSE's out there, there is certainly a
wealth of suspects. Just for fun, here are some
ANLT has internal production software which is
It's call APS--Analytical
Production Software. It's been in refinement since the late
80's. Prior to the acquistions the core business in
Colorado Springs was doing a little more than $120,000 per
employee in revenue, which was about double the
productivity of thier competitors. The acquired business are
at varying stages of integrating this system and the
productivity boost at the acquired companies is above
expectations. Hence the after-tax margin bumps of the last
Look for this to continue in both the existing
business and any additional acquisitions.
To Lampest, agree with you on GIS industry, and
this is clearly the leader with some of their name
clients, and if you know anymore "dogs" like this, it has
gone from $4 to $28 in the three years I've owned it,
please do tell.
To Visionsphere, wonderful analysis,
only things if you take out Indian acquisition, there
have been THREE meaningful acquisitions (not two as
you state), Intelligraghics, Landmark, and MSE,, and
also, if you factor in the amount of profitably ANLT
has brought to these purchases, you're figuring might
change, do not lose sight of what this mangement can
for discussion. There is no question that real
driving force behind the spectacular price increase in
ANLT stemmed from from the momentum force initiated by
the abnormal growth percentages for both sales and
income which were generated almost entirely by two
significant acquisitions. This is borne out by reviewing the
prior five year sales and earnings figures and
comparing percentages. As time passed and the year to year
quarterly comparisons gave way to the ability to compare
sequential quarterly data came about the startling growth
percentages became just good ones. Exit the momentum player
and enter the more uninitiated investor/speculator
who was still looking behind and extrapolating from
the known data expectations that could no longer be
supported by the facts.
Those of us who do try keep
our emotions under wraps when evaluating a stocks
worth tend to come off as negative to many who are
enticed by a hot story or even hotter market action. In
the end, except for the most nimble short term
players, we tend not to get into $15 - $20 stocks after
they have zoomed to the mid fifties and wonder what
happened when reality sets back in and the stock sells
back down to the mid twenties.
There is no
doubt in my mind that each five point level starting at
$30 will present a hurdle to be overcome. A simple
look at any daily chart with volume shows you areas of
anxious holders, all of whom expected something other
than to have the stock they bought between $45 and
$50, or $40 and $45 or $35 and $40, etc. fall to
$22-23. Included in that group perhaps are those who rode
the stock all the way up and then took the round
trip. As the stock rallies, these people now may have a
different perspective then they did when predictions of,"
next move $60 or I believe at one time there were some
posts projecting $100", were bandied about the
You surmize correctly that for this stock to
penetrate those supply zones I have indicated exist without
backing and filling as each new level is reached, ANLT
will have to come up with a new set of acquisitions
which will add dynamic numbers to those already on the
As you should know from some of my
previous posts, I did not become a shareholder until more
recent times when the stock broke down under $30. I
started picking up shares at 27 and bought on a scale
down to $25 3/4. At these levels my judgement tells me
there is value based on what they have in hand, what
can be added to by normal business growth and since
the industry is still fragmented with no one company
controlling the bulk of the business that's out there, there
is more than a wild guess that we will see
additional acquisitions. If these buys are made with the
same care as the two most recent ones, and please
don't consider the India one of any serious
consequence, we should see this stock back over the $40 level
sometime over the next 12 to 15 months.
unless the stock violates the $24-$25 level on the
downside, I have to believe that the stock has bottomed out
and will continue to quietly rebuild a base level
between $26 and $30 from which to resume a new
Hope I did not confuse you.