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Geoffchase and I had kicked this idea around on another board. I have finsihed looking at Rational Software and think they have the making of a Rule maker.

They meet all the criteria numerically- Sales growht, Flowie ).8, high groos margins, lots o' cash.

I don't know whether they fall short of criteria number 1- Dominant brand. I confess to being a bit out of the loop when it comes to software companies- residency will do that to you...

Anyone else here evr thought of these guys.

YOUR FRIENDLY NEIGHBORHOOD SPIDERMAN
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Spidey wrote in 5873:

Geoffchase and I had kicked this idea around on another board. I have finsihed looking at Rational Software and think they have the making of a Rule maker.

I've just taken a brief look at RATL -- this just stunned me:

Profitability
Gross Margin (TTM) % 85.42
Operating Margin (TTM) % 88.68
Profit Margin (TTM) % 84.72

I'm sorry I skipped over that discussion -- this bears much closer examination.

--Anthony

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I've just taken a brief look at RATL -- this just stunned me:

Profitability
Gross Margin (TTM) % 85.42
Operating Margin (TTM) % 88.68
Profit Margin (TTM) % 84.72

I'm sorry I skipped over that discussion -- this bears much closer examination.



Anthony,

I'm not exactly sure where you got those numbers from, but they definitely don't look right. I just pulled up their most recent 10-Q for 2000Q3, and this is the data I found for the past 9 months:

Total Sales 391,771
COGS 58,588
Net Income 59,398

Gross Margins 85.0%
Net Margins 15.2%

Not too shabby, but nowhere near the 80+% net margin figure. I guess this proves that it is always worth it to run the numbers yourself, rather than to blindly trust someone else's interpretation.

Hope this helps.

the LanceMan
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Hi Lance,

I'm not exactly sure where you got those numbers from...

I copy-n-pasted them from some place called "The Motley Fool." :>

Here's the link:

http://quote.fool.com/snapshot/snapshot.asp?symbols=RATL

It's probably an error on the part of whatever service provides your data, then.

I guess this proves that it is always worth it to run the numbers yourself, rather than to blindly trust someone else's interpretation.

It sure does! ;>

see ya,
--Anthony
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TMFTribe: I'm not exactly sure where you got those numbers from...

IrishSpy: I copy-n-pasted them from some place called "The Motley Fool." :>


Doh! I was afraid of that.

I've noticed some weird figures on the Snapshot page from time to time, usually with the Operating and Net Margin figures. I know at one time AOL showed a negative Operating Margin and a positive Net Margin ... go figure that one out! I guess this is just another example.

Fool On!

the LanceMan

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Here are the numbers I ran when Joel mentioned them and my other responses...

http://boards.fool.com/Message.asp?id=1380457000305001&sort=id

Now, I think they would score well on a RM given the rather, how shall we say, "not terribly stunning" array of competitors. Only Computer Associates is any kind of "name".

Rational has amazing financials with a decreasing flowie in the area of 0.8, last 10-Q. It also has strong margins and all the other goodies in the way of lots of cash and no debt.

That said, the real question is, is their software, while good, the kind of product that they can grow to broad acceptance in a variety of areas. Will they continue to sell more and more of it and provide a long term upgrade and/or growth pattern?? That is hard to tell with these "quieter" companies whose products are used by the companies we hear more about to make their products.

This I dont know as I dont know this sector real well. Anyone got any thoughts... I will run a ranker sometime soon if I can get a few moments away from my HS robotics team (3rd place in the west coast FIRST Robotics regional today!).

cheers,

jgc
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