My 2007 top stock pick is IIR (Independent International Investment Research plc)

Website: www.iirgroup.com
Share price: 20p
Capitalisation: 5.2 m
Year end: 28 Feb 2007

Overview

Independent International Investment Research (IIR) provides research on
global companies and currencies, for broker-dealers, investment banks, money managers and private clients.
The equity research business comprises wholly owned subsidiary Independent Financial Markets Research Ltd. (IFMR). The India-based (Chennai and Mumbai) equity research team now covers 300 companies, of primarily non-US with American Depositary Receipt programs.IFMR, established in 2002, has benefited from the 2003 Global ResearchAnalyst Settlement (GRAS) in the US, which required broker-dealers to provide independent research to retail clients.

Supplementing the equity research business, Pronet Analytics.com Limited
(Regulated and Authorised by the FSA in the UK and registered as an
Investment Advisor with the SEC in the US) offers investment advice and trading strategies to clients such as Standard Chartered and Citigroup. The ability to combine currency forecasts with the Group's fundamental equity research also offers an attractive product differentiator and has helped improve the performance of recommendations for US$-based investors in overseas stocks.


Insinger initiated coverage in September 2006 after the company finally turned a corner and became profitable with the new business model starting to bear fruit. The report provides a detailed background of the company & the new business model [far better than I could hope to write myself].

http://www.iirgroup.com/iir/docs/Insinger_research_note_Sep_2006.pdf

The forecasts were very conservative as you would expect at such an early stage of the companies turn around in fortunes, these forecasts have since been easily surpassed & a trading update was issued on the 20th Dec ;

http://www.iirgroup.com/iir/docs/Trading_update_11_December_2006_v1.7.pdf

Followed closely by an upgrade in forecast from Insinger showing a substantial increase of 261% in EPS forecasts ;

http://www.iirgroup.com/iir/docs/06-12-2-IIR.pdf

At the time this meant the company was trading on an 83% discount to research-oriented peers and as such has risen to today's price of 20p per share [was 13.5p when picked]. This is still very cheap and only puts IIR on a PE of 8 despite their exceptional growth - versus an industry average of 20 25.

Whilst the company does not have a history of earnings performance it is worth bearing in mind that the Insinger forecast only includes CONTRACTED business and does not take into account conversion of the strong existing pipeline or any new pipeline as the year progresses [see comments in trading statement + confirmed by CEO] Additionally any potential revenues from new product developments & other medium term growth drivers [see Insinger initial coverage & last finals] are excluded.

Furthermore the company is looking to break into new areas where independent research is beginning to take hold, in particular SE Asia & the UK. Market commentary is very positive for growth of the indies into these areas. A very useful source of industry specific information is;

http://integrresearch.blogdrive.com

To assist their major expansion plans they are currently strengthening the management team and looking to increase the research analyst heads in their Indian subsidiary from the current 60 to 200 staff during the .

As well as organic growth, earnings accretive acquisitions in the research space will be considered - Any acquisition would be paper based,

The current CFO for example is PT and cannot give any more time so a replacement is being sought, [any of you looking for an interesting role?] Details of which I attach as it gives an insight into where the company is heading in 2007;

http://jobs.efinancialcareers.co.uk/job-4000000000223293.htm

To conclude

+ Current PE is 8 versus industry average of 20 25.

+ Current EPS forecast is ultra conservative as based on contracted business alone, excluding the pipeline and likely additional business wins + growth into new areas.

+ Management & research team being strengthened to take advantage of the pipeline of deals.

+ Mr Smith CEO is planning a number of investor relations exercises [Insinger coverage was the start of this] early this year which is hoped will see the company more appropriately valued by the market.

+ Has very little debt, the company has been supported financially by Mr Smith & his trust over the last 2 years.

+ Significant taxable losses to utilise

+ Potentially a bonus of a multi million settlement from Google for Gmail trademark claim - talks are discussing after previous offer by Google was rejected.

- Liquidity is poor but will hopefully be addressed in some way as part of the investor relations drive and paper being issued for earnings accretive acquisitions.

http://www.iirgroup.com/products/GER/researchuniverse

AN ANNOUNCEMENT REGARDING THE CONCLUSION OF TALKS WITH GOOGLE ABOUTGMAIL DISPUTE IS DUE IN OCT NOW ..................

http://news.bbc.co.uk/1/hi/business/4354954.stm

Gmail, the free e-mail service run by internet search giant Google, will change its name for new UK users.

Following a trademark dispute the mail account will be renamed Google Mail.

London-based Independent International Investment Research says it started using the Gmail name for a web-mail application two years before Google.

Current UK users of Google's service will be unaffected, but a separate trademark dispute forced Google to drop the Gmail name in Germany in May.

Talks between both companies broke down several months ago, after they failed to agree a financial settlement.

Gmail v Google Mail

Google's Gmail e-mail account is free, comes with just over 2.6 Gigabyte of storage space and allows users to view their e-mail with all messages on a single subject linked together.


Google Mail logo
We want to avoid any distraction to Google and to our users
Nigel Jones, Google

In return, users have to live with the fact that Google's search engine analyses their e-mail and places small context-driven internet links next to their mail, some of which are paid-for adverts.

The service, launched on 1 April 2004, is officially still in "beta", a technical term to describe the test phase of a product.

In most countries Gmail accounts are available on an invitation-only basis, although existing Gmail users have been offered as many as 100 invitations to distribute to friends and family.

From Wednesday morning, new users in the UK signing up with the Google service will be given an e-mail address that ends with "@googlemail.com".

German users with this address report that e-mail sent to their username but ending with "@gmail.com" instead of "@googlemail.com" will still arrive at its destination.

Trademark dispute

The dispute between Google and Independent International Investment Research (IIIR) centres on who owns the Gmail trademark.

The London-based research firm, with a 3.24m ($5.6m) stockmarket value, says it has used the name "Gmail" since 2002 to describe the mail function of its online information tool Pronet, mainly used by investors in currency derivatives.

Companies like Citigroup, Deutsche Bank and Bank of America are among the British firm's clients.

After Google announced its Gmail plans in spring 2004, IIIR rushed to register the Gmail trademark with Ohim, the European Union's trademark office, and the US Patent and Trademark Office.


For our clients, Gmail is the most prominent function... it's a big green button that says 'Gmail'
Shane Smith, Independent International Investment Research

Google, with a stockmarket valuation of $54.4bn (31.1bn), disputes the trademark claim. IIIR "has failed to provide evidence of its common law rights to the name", said Nigel Jones, Google's senior European counsel.

But to "avoid any distraction to Google and our users", the company would switch to the Googlemail brand in the UK while the dispute was being resolved at the various trademark offices.

The case could still go to court, though. IIIR's chairman and chief executive Shane Smith told BBC News that Google broke off negotiations "unilaterally", and that his company was now investigating its legal options.

"For our clients, Gmail is the most prominent function of the Pronet tool, it's a big green button that says 'Gmail'," said Mr Smith.

Google's rival Gmail service had created confusion and uncertainty amid potential clients of his firm, said Mr Smith.

In Germany, Google is already in the courts over the Gmail name. On 13 September the US search firm lost an appeal against a court injunction that stops Google from using the Gmail brand in Germany.

There a Hamburg-based company had registered the term "G-Mail" five years ago, to advertise what it describes as a "hybrid mail service", bridging the gap between electronic and hardcopy mail.

Mike Lynd, partner at patent and trademark attorneys Marks & Clerk, predicted that "as a result of inadequate IP searching and protection" Google now had "a real battle on its hands in gaining the Gmail trade mark within the European Union".

'Exorbitant sum'

The breakdown of negotiations between Google and IIIR ultimately comes down to money and a disagreement about the value of the Gmail trademark.

IIIR boss Shane Smith points to an independent valuation of the brand, compiled in December 2004 by Valuation Consulting Limited, which suggests a value of between $48m and $64m, although he says his company would have settled for much less.

Google's Nigel Jones, however, says IIIR demanded an "exorbitant sum" in exchange for dropping its claim on the Gmail trademark.

Both sides are cagey about how much was at stake, but BBC News understands that a settlement worth millions of dollars had been discussed.

For now, though, Google will not be able to promote one of its most high-profile brands in two of Europe's largest economies.

Mr Lynd said Google might want to "cut their losses now and... look at re-branding to Google Mail within the whole of Europe".

GET SOME MONEY AND LOOK TO THE FUTURE

TB that news is at least 2 years out of date!!!

look 2 years ago they were offered few millions
we might endup getting a lot more with value of gmail trade mark has gone up



IIIR boss Shane Smith points to an independent valuation of the brand, compiled in December 2004 by Valuation Consulting Limited, which suggests a value of between $48m and $64m, although he says his company would have settled for much less.


Both sides are cagey about how much was at stake, but BBC News understands that a settlement worth millions of dollars had been discussed.

I'll be happy if we get something out of the google mess but i bought IIR for their future business potential and nothing ive seen or read recently has changed my view that this company will ultimately be very successful. Dont buy IIR for google cos you'll get burnt when you are unable to sell if it doesnt come off! The business is the future, everything else is just a windfall and not guaranteed imo.

Bl00dy hell think big \ hamaida that was another quick change of opinion, last week google was a dead duck & now we are likely to get million ???? Even my misses dosen't change her mind as much as you !

How do jd, totally agree with all points in 222.

well something not right here,ok down on only a few sells unless their are some hidden trades to come later,all this suposed good news to come i wouldnt expect the sp to drop as much ,not holing out much hope for the short term .

well we will get below 1 million usd

With nothing forecast that will be great news, do you have any facts to back it up ????

copshaw this should cheer you up ;

http://ttabvue.uspto.gov/ttabvue/v?pno=92046974&pty=CAN&eno=8

Looks like a settlement soon then!! I'd take a pathetic $1mil just to see an end to this distraction. If this finally is the end, can expect a fair amount of buying before its announced. Although knowing this stock it will probably go down!!

scotty ,i think i can see light at the end of the tunnel,thanks

Well im more than reassured by that announcement! I can see daylight at last. Hopefully the SP will respond well over next few months as there seems to be plenty of positive things to look out for.

The AGM was very reassuring, posted summary on ADVFN if you havn't already seen it. Looking for a significant rise between now & Dec based on expected newsflow & more reassured than ever that we will see a substantial step change in the size of the company.

cheers scotty,when do you think we will make the 400.

November the 5th would be ideal ;o)

In truth I don't think it will be far off this date, almost 2 months ahead of forecast despite the time spent by some of the analysts on new product development.

Scotty,

Was anything said at the AGM about issuing the extra 50mil shares or is that off the agenda at the moment? Maybe they are banking on a nice little earner from google filling the coffers instead! Wish these damn 20% swings would bugger off!

All resolutions were passed so they have the option if they choose.

It was made clear that it certainly wouldn't be done at this price but perhaps in the future [assuming a suitable acquisition] but definately after the expected newsflow.

Incidentally there is a small update on the USPTO link regarding the google settlement negotiations.

like i said they will only get few hundred thousand from google and plus all the fees
iir need to pay enough might be left to clear iir debt .......on the trading front things are looking up looks like a lot of good news to come out