Opened new postion in NCHIPER NCH. IT tech security play. A momentum investment punt for me which is rather unusual but the stock at around its present price is only just over its net current assets of 38 million at 30/09/2003. US customers have defered orders but with the growth figures coming from across the pond this week and business acivity picking up in general I thought at this price the stock was too cheap to overlook. Market cap circa 42 million.

Broker Durlacher has a 225p price target.

Please DYOR, you are responsible for your own buying and selling actions.

cheers GF.

I agree Goldfinger. In their third quarter results they said that the majority of the deferred orders had been booked in the current quarter. NCH is a survivor and recently returned a huge chunk of capital to investors.

Compare Plasmon (reporting today) which also said that IT spending was still being deferred.

Cheers B1, looks better by the minute.

GF.

Research on NCHIPHER.


http://uk.biz.yahoo.com/z/n/nch.l.html

Also NCH was a Play of the Week in SM not so long ago. In a recent update they said HOLD as downside minimal given cash pile. On the other hand the FT last weekend had a rather bearish view on NCH saying its 3Q results reminded us that the company was just a small software outfit dependent on the big boys.

NB the Van Someren brothers who founded & run the company are v smart cookies well known around Cambridge (where I live) and have steered NCH successfully through the worst of the dot.com crash.

B1 the Ft seem to have a bearish view on anything that is high tec.

The accounts look rock solid to me, and world trade is picking up. I go along with yours and share mags bullish view.

cheers GF.

Heres another tip update article on the stock.

Tip Update: don't cash in your Ncipher chips yet

Published: 16:06 Tue 11 Nov 2003
By Joanne Wallen, Associate Editor

Email to a friend


Ncipher has seen more profit taking after revealing that a delay in some third quarter contracts but the company is consistently reducing its losses and the potential for the business is still huge.

Shares (NCH) are down 15p at 171.5p. However anyone that followed Citywire's tip in August last year at 51p should not be too disappointed.


Chief executive Alex van Someren reckons one of the inevitabilities of quarterly reporting is that contract signings will not always fall neatly into the quarter, and this was the case with the third quarter to September.


However many of the US deals the company had been banking on did close after the quarter end, making van Someren confident about the final quarter. He told Citywire that the company's core business, which provides hardware-based products for securing online transactions and digital certificates, is doing well and he sees no reason for analysts to change their view for the full year.


The company's newer business, securing online credit card transactions, has not taken off as fast as some were predicting, but van Someren said some people 'expected that online payment authorisation would suddenly provide riches,' whereas the company has never claimed it would happen over night.


The system is designed to secure customer credit card and PIN (personal identification number) data within banks. Ncipher's hardware ensures that no one in the bank can remove a disk containing valuable credit card and PIN data.


Van Someren said that while Visa, MasterCard and American Express have all bought hardware from Ncipher, the banks are traditionally slow at changing systems and making major purchasing decisions. Online card fraud has clearly been identified as a major problem, and van Someren is 'confident that this will be a very good business,' but it will take time to build.


Turnover for the third quarter to September was up 4% on last year to 2.9 million although down from the second quarter. Operating losses fell to 550,000 from 1.7 million. For the nine months, turnover was up 13% at 10 million and operating losses fell to 2 million from 6.5 million.


A big plus for the company is the 39 million sitting in its bank account. Van Someren said he is evaluating acquisitions although so far no strong acquisition candidates have emerged.


Analysts expect the company to reach profitability by the end of next financial year and to be profitable for the full year 2005.


During September Ncipher launched a new product that enables a company to 'seal' an electronic document with a tamper resistant time stamp. Initial customers include governments and companies wanting to use digital documents as evidence or for regulatory purposes.

Citywire Verdict: The company is currently valued at 43 million and has nearly 40 million of cash, which should provide considerable comfort.


IT security is a huge and ever more critical issue, particularly now that so much money is being transacted over the internet and Ncipher tackles the problem from a tangible point of view, providing tamper-proof black boxes that keep software encryption physically safe.


The company should therefore have a big market to go at once IT budgets free up and once the banks start to adopt new security practices. However, the company needs to keep demonstrating that profitability is within reach.


Always wise to consider booking profits while they're there, but I would hold on to a stake for now.

Nice one GF. Yes quarterly reporting is ridiculous for a company that small. Driven by the US I suppose.

In fact NCH has ticked up a whisker today.

GF I think we are talking to ourselves here. Maybe NCH is a bit mainstream for some of the posters on Moneyam - you can't expect it to go up 300% overnight!

No, some of us are listening :-)

Nice to see you DC.

Up 2.2% today - well done GF you singlehandedly moved the market! Not that I bought any but I did buy some a couple of days ago @ 162p.

Hi GF, what do you think of RED?

Apple, red Is that redstone tele, if it is a nice little play that one, havent bough but I saw it had reduced losses from off top of my head from about 4.25 million to about 2 1/4 million, plus TechInvest tipped it about 2 months back and it was a very good write up.

See NCHIPER ended the day in glory two big buys added another 2p north.

Still a momentum play for me as I go for undervalued companys as a whole, and this one not making profits doesnt just fit the criteria yet.

But think theres quite a bit in it, if we stay bullish on the markets.

cheers GF.

Yep Redstone, Thanks.

Up again this morning.

gf.

Does anyone know why - except that price had dropped close to NAV?

B1, deffered orders in the last quarter, but they have now been booked in this quarter. Think its all in the last RNS.

cheers GF.

The bid ticked up to 162 in the last 15 mins on Friday and is still there. The spread has widened as the offer is up to 167p, though. only 6,000 traded so far today.

Up 1p on the day on low volume.

gf.

Up again today on low volume. Sometime now analysts are going to realise this one is very cheap, just trading above its cash.

cheers GF.

Up 4p this morning and bombing.

GF.

Dropped a few pence of late. A sure bargain worth buying into.

cheers GF.