July 24, 2003 Fair Isaac Corporation (FIC)
Stocks were looking so nice this morning and then about 2:15 just pooped out. So much for a nice morning rally!

If you read the previous post, you will see that I jumped out of NCEN...with a nice gain still remaining....and bought FIC...Fair Isaac Corporation. Fair Isaac, according to CNN.Money "...is a developer of data management systems and services for the financial services, retail, healthcare, telecommunications, personal lines insurance and other industries."

In spite of the pullback late in the session, FIC held on to a nice gain closing at $55.42 up $5.13 on the day or 10.20%. They performed well as the company reported a superlative earnings report for the second quarter yesterday: revenues were $163.0 million vs $91.0 million last year. Net income was $30.0 million or $.60/share compared to $14.4 million or $.41/share.

Morningstar.com shows a nice historical pattern of growth in this company: $246 million of revenue in 1998, $276.9 million in 1999, $298.6 million in 2000, $329.1 million in 2001, $392.4 million in 2002. Extrapolating the present quarter gets us over $640 million in revenue for 2003.

Free cash flow has grown very nicely from $14 million in 2000, to $47 million in 2001 and $80 million in 2002. Morningstar.com reports $109 million in free cash flow for the trailing twelve months.

Cash on hand is ample at $165.8 million with $152.7 million of other current assets. This is more than enough to cover the current liabilities of $90.9 million and $146.9 million in long-term liabilities as well.

Looking at Yahoo.com, we find that the market cap is $2.37 billion, 47.2 million shares outstanding and 46.4 million of those float. The company DOES pay a small dividend of $.08/share yielding 0.16%.

There are quite a few shares out short as of 7/8/03. At that time there were 4.59 million shares reported out short representing 11.64 days of average trading volume. This is bullish as it represents borrowed shares that have been sold requiring the short sellers to purchase these shares sometime in the future.

The p/e IS a bit steep at 53.84 and the company HAS had a great year already...but I like this stock a lot and as such have already purchased some shares (150) in my trading account.

Regards to all of my friends. Thank you for visiting and come back often! eMail me with any questions, comments, or words of encouragement at bobsadviceforstocks@lycos.com.

Bob