iri- green alert to 20c

It looks like iri has been oversold last week based on revision of earnings to the range of 0.5m to $1.4m. This has been a hard year for the IT industry with war and uncertainties in the world. With that in mind iri has done extremely well to come up with the profits and actually paid a 0.75c dividends earlier this year.

Based on estimate of say $1m after tax profit it is indeed trading at about the 20 times earnings but remember this is a bad year and the directors could be extremely conservative in estimating. Any improvement which I thin iri has the upside to deliver say in the coming financial year, to $2 to $3m after tax would make the current price significantly undervalued.

I have had a look at their products and their list of impressive clients, banking and financial services in Aust and Asia Pacific. Their system management system Prognosis version 7 seems to be well respected and earning good dollars. With such impressive clients and product that works I dont think iri can go far wrong. It has after all $6m in cash at end of May. The product has a lot of potential as well in terms of enhancement ie great potential for the medium term. Sales and revenue should improve in the next financial year as the world recovers.

I like iri on the following basis and I think derserves a green alert to 20c (which was where it was only in the last month or so):

- product that works
- impressive list of clients
- still making profits, although less than what market wants (but this should turn positive)
- cash available
- pays a dividend: final to be announced depends on results
- product continuously enhanced
- seems to be at its low at about 11c poised for bounce
- improved volumes last couple of days with reasonable buying and volume

Research yourself and see if you agree.

Bigprofit