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Was going through the biggest movers today, and came across Secure Computing Corporation (SCUR). SCUR is trading as I write at $16.78, up $1.51 or 9.89% on the day. I do NOT own any shares of this stock but wouldn't be adverse to buying some...just that MARGIN balance of mine...I really will need to make a New Year's Resolution to make sure that goes down in 2004! According to Money.cnn.com, Secure Computing "...develops and sells computer software products and services designed to provide secure extranets for companies engaged in electronic business."
For those of you new to these parts, the first thing I like to check is the latest quarter. I eliminate stocks from this site if the latest quarter shows negative revenue growth or negative earnings growth! For SCUR, checking out Yahoo.com, I found that on October 16, 2003, SCUR posted third quarter results. This story was posted on Yahoo, from a story run on BUSINESS WIRE. For the three months ended September 30, 2003, total revenue increased to $20.1 million from $17.6 million in the same quarter in 2002. Net income was $2.6 million vs $.48 million in 2002. On a per share fully diluted basis this amounted to $.08/share in 2003 vs $.02/share in 2002.
Looking at Morningstar.com (my usual second step in a stock screen), I am a little concerned about the drop in revenue between 1998 and 1999. However since 1999, the company appears to be growing steadily again. Revenue dropped from $61.4 million in 1998 to $27.1 million in 1999, but then grew to $39.1 million in 2000, $52.5 million in 2001, $65.8 million in 2002 and $71.0 million in the trailing twelve months. If we extrapolate the current quarter of $20 million in revenue would get us currently at an ongoing revenue rate of $80 million/year.
The company has been losing money up to the current year. $(.20)/share in 1998, finally improving to $.12/share in the trailing twelve months. Free cash flow which was also negative at $(16) million in 2000, improved consecutively to $(12) million in 2001, $(2) million in 2002 and $2 million in the trailing twelve months.
The balance sheet, as reported on Morningstar.com looks just fine at $22.2 million in CASH with only $21.6 million in current liabilities and NO long-term liabilities listed. In addition, SCUR has $18.2 million in other current assets.
Looking at Yahoo "key statistics", we find that the Market Cap is a small $573.65 million. The trailing p/e is very rich at 96.71, forward p/e only slightly better at 36.36 (but company is JUST turning profitable), and PEG ratio is 2.89. Price/sales also no bargain at 7.13.
There are 34.29 million shares outstanding with 32.90 million of them that float. As of 12/8/03, there were 1.86 million shares out short representing 5.39 trading days. No dividend is paid, and no stock split is reported on Yahoo.
This is an interesting stock and deserves a place on our list. Personally, I would rather pay a little less for this stock...in terms of p/e, PEG ratio, price/sales and the like. However, the numbers look nice and it will be interesting to see how this stock performs going forward.
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