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News Alert
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Trident Systems International, Inc (OTCBB: TDSY) |
6 Month Target Price: $2.99 |
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| Shares Outstanding |
11.7 million |
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| Approx. Float |
1.6 million |
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| 6 Month Price Proj. |
$2.99 |
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A Few Reasons to Own TDSY:
| 1. |
$40 Billion Dollar industry |
| 2. |
30% Annual Industry Growth |
| 3. |
TDSY Embarks on $100 Million Synergistic Acquisition Strategy |
| 4. |
TDSY Projects 2002 Revenue of approximately $19,500,000 |
| 5. |
TDSY Projecting $30,000,000 in Revenues for 2003 |
| 6. |
Veteran management team with proven industry track record |
| 7.
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Continuous legislation of complex employment laws and regulation necessitate the outsourcing of human resource management |
| 8. |
TDSY Recently Launched New Multi-Channel marketing initiative |
| 9. |
TDSY Entered definitive Letter of Intent to acquire a Computerized Payroll Services Company |
| 10. |
TDSY’s CEO appointed presidential business commission and honorary chairman of republican parties business advisory counsel |
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| Update |
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Huge News! With TDSY projecting around $20 Million Dollars in revenues for 2002, this acquisition would bring TDSY's revenues to $24 Million. As stated below, our hypothetical valuation for TDSY is based on revenues of $30 Million Dollars for 2003.
According to the press release( read below), in our opinion, it appears to us that TDSY might be ahead of its schedule for top line growth. Therefore, if all this turns out to be true, then our hypothetical 6 month target price could possibly be too low.
As always, time will tell, and one never knows when these PR announcements will pop up!
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| Press Release |
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TRIDENT SYSTEMS INKS DEAL TO ACQUIRE $4 MILLION COMPANY
WHITEHOUSE, NEW JERSEY, December 19, 2002. Trident Systems International, Inc. (OTCBB: TDSY) signed a Definitive Letter of Intent to acquire National Employment Alternatives, Inc., a New Jersey based PEO or professional employer organization with approximately $4 million in annual revenue. This acquisition increases our revenue by more than 20% and demonstrates our company's strategy to acquire companies on an accretive basis.
This acquisition is structure as part of our recently launched marketing and expansion program. This strategy is comprised of both a $100 million sector acquisition strategy and a multi-channel marketing campaign.
The primary goal of this strategy is to capture additional market share and build upon our 2001 revenues of more than $17 million. Trident CEO Stephen Farkas commented, "We believe that our Company is uniquely situated to take advantage of the fractious PEO market with regard to acquisitions. Similarly, we are well positioned for organic growth as more and more employers are searching for ways to streamline their businesses in order to save money and yet still offer a wide array of employee benefits to their employees"
The PEO market is $40 plus billion dollar a year industry with annual growth exceeding 30% according to NAPEO. "The continuous and complex legislation by the Department of Labor, IRS, State and Local Government combined with the escalating costs of benefits and quality healthcare create a fertile environment for organic growth in the small and medium size company market. We intend to capitalize on this business climate by aggressively marketing our services to this underserved market", explained Stephen Farkas, CEO.
About the Company:
The Company, through its subsidiary AAMPRO, Inc. ("AAMPRO"), has refocused its business operations as a professional employer organization ("PEO"). AAMPRO provides a broad range of services comprised primarily of employee leasing and human resources management. These services include payroll and benefits administration, health and workers' compensation insurance programs, state and federal labor compliance, tax filings, safety program design and management and other related services to small and medium-sized businesses nationally with a primary concentration in the tri-state (New York/New Jersey/Pennsylvania) region. AAMPRO was organized as a corporation in 1995 and has provided PEO services since inception.
AAMPRO's services are designed to improve the productivity and profitability of small and medium-sized businesses by relieving business owners and key executives of many employer-related administrative and regulatory burdens that enable them to focus on the core competencies of their businesses.
Forward-Looking Statements
This news release contains forward-looking statements about our business, or financial condition and prospects that reflect our assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. There may be other risks and circumstances that we are unable to predict. When used in this news release, words such as "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions. All forward-looking statements are intended to be covered by the safe harbor created by Section 21E of the Securities Exchange Act of 1934.
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| Valuation |
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With the PEO industry valued at $40 Billion Dollars, and growing at a rate of 30% annually, it appears to us that TDSY has plenty of room for growth. TDSY generated $10 Million Dollars in revenue in year 2000, and 17 Million Dollars in 2001. With an experienced management team and state of the art technology, TDSY could also be one of next years surprise stocks.
If we look to value TDSY on a multiple of revenues, if TDSY were to trade today in the marketplace, at one half the multiple of revenues as its peers (which is 2.33 times), then based on the company’s forecast of $19.5 Million Dollars in revenues for 2002, this would equate to a stock price of $1.94 per share. Which would be about a 150% Profit from today’s close, and could represent a short term move up, since 2002 is just about over.
If over the next 6 month’s as developments evolve for TDSY, and the market catches on and believes that TDSY is on track to generate $30 Million Dollars in Revenues and be profitable, then applying the same formula above would imply a potential stock price of $2.99 per share.
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| Conclusion |
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With the continued positive outlook in TDSY’s revenue and earnings growth, we believe that TDSY is a compelling and undervalued investment opportunity for risk-oriented investors. We believe, as Wall Street catches on to the TDSY story, this could have positive effect to TDSY’s share price.
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******* Important Notice and Disclaimer: Please Read *******
Investor Insights, and affiliates (II), publishes reports providing information on selected companies that II believes has investment potential. II is not a registered investment advisor or broker-dealer. This report is provided as an information service only, and the statements and opinions in this report should not be construed as an offer or solicitation to buy or sell any security. II accepts no liability for any loss arising from an investor's reliance on or use of this report. An investment in TDSY is considered to be highly speculative and should not be considered unless a person can afford a complete loss of investment. An affiliate of II has been compensated fifty thousand free trading shares of common stock of TDSY by a third party for the publication and circulation of this report. II intends to sell all or a portion of the of the TDSY stock at or about the time of publication of this report. Subsequently II may buy or sell shares of TDSY stock in the open market. This report contains forward-looking statements, which involve risks, and uncertainties that may cause actual results to differ materially from those set forth in the forward-looking statements. For further details concerning these risks and uncertainties, see the SEC filings of TDSY including the company's most recent annual and quarterly reports.
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