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QAD is set to climb higher. The stock currently has a P/E in the mid-30's while the rest of the industry is near 100. Unfortunately in QAD's most recent earnings announcement (4th quarter ending January'98) the company failed to adequately explain the differences in same quarter growth over previous year. Historically a large portion of QAD's revenues have come in the 4th quarter. Too much in fact. The company has been making a concerted effort to balance their sales quarter to quarter, eliminating the quarter to quarter sales fluctuations, and provide the street with a forecast of steady quarter to quarter growth.

Wall Street is looking for QAD to grow at 40% in FY98. I believe this estimate to be conservative. With other ERP companies trading at more than 100 times earnings QAD (P/E 37) looks like a bargain.

QAD's business in Asia grew last year at close to 100% despite the economic turmoil experienced in the region.

It would appear that QAD's rapid implementation methodology yields the low risk / high return its customers are looking for. This is achieved in part due to QAD's focus on its vertical markets. QAD software is installed in over 50% of the worlds largest medical device manufactures, 75% of the world's largest automotive suppliers, 30% of the world's largest electronics and industrial companies and 75% of the world's largest soft drink companies including Coca Cola and Pepsi. Other customers include Kraft, Avon, Johnson & Johnson, Black & Decker, Ford, Gillette, St. Jude Medical, Unilever, Schlumberger, Philips, Daewoo, AT&T, Sun Microsystems, and Colgate Palmolive

Furthermore companies are starting to get real nervous regarding their software that can't handle the year 2000. The reason they are so nervous is that the time to fix the problem has just about run out. As companies start evaluating various software alternatives to deal with this problem they will soon find out that QAD is really the only company with a proven track record of reliable, super - fast implementations.

Watch this one!

Climb Higher
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