Forum Archive Index - August 2001

["Sproul Familly" <msproulfamily@xtra.co.nz>]

John,

 

Yes, my interest was aroused by the previous thread, and finished up taking a small interest. in SNX. 

 

For what it's worth:

 

1.  They appear to be a smart bunch of cookies running a lean, mean operation, funding most of their R & D out of cash flow.  They did  however get a $2.6 million dollar R & D grant out of the Aust. government ( even with $116 million cash in the bank!).

 

2.  They are concentrating on the Asian market , and M.D. Geoff Ross moved to Hongkong with several of their top guys. They have formed some alliances with large corporations including Hongkong Shanghai Bank and others , who are putting the capital  into the Joint  Ventures, another cash-saving benefit.  It is stated that there are a "bunch of big projects in the pipeline."

 

3. If you have not read it , the best insight is in the Corporate File interview with Mr. Ross, on the website at

 

http://securenet.com.au/   or on the SNX company news on Stocknessmonster

 

4.  I guess Securenet could be considered to be doing well , considering the pounding taken by tech-type stocks  recently.  In the interview, Ross says that they will probably be able to pick up some "quality assets at bargain basement prices" .  So they are intending to spend a fair bit of the $116 million, it seems.

 

In conclusion, I would say that all tech stocks are speculative, but that this may just be one of the better ones.

 

The biggest problem I have with companies like this is that they hardly ever are able to put dollar values to the worth of the contracts they win.  For example , they have announced  a deal with the Hongkong Jockey Club, but who knows what the revenue stream will be - maybe it's partly based on a transaction fee and even SNX don't know??????

 

SNX is certainly a long term investment, and don't expect any dividends for a few years.  And the chart trendline has been DOWN for a while, although it appears to be flattening now. So there may be opportunities to pick up some SNX under today's price. The were down around $1.18 August 17, before their Annual report sparked some interest.

 

For myself, I will be keeping an eye on the $116 mill.cash over the next twelve months or so to see what acquisitions they make, and if any of the "bunch of projects" come to fruition.

 

All the best,

Dave

 

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