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

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

Crazy day! I wish people would forget Google and just invest for the business, then we wouldnt get these stupid swings!!

!

Things are looking up!!

How goes it rob ? Still can't pick up more than a gnats arse worth of shares yet they leave the price dangling down here - won't be long I don't think before we get an update - would rather wait until they had some 'hard' news anyway.

YE this week, another year passes but at least we are looking more and more like being all set for take off :o)

Hey Jdubb when you going to update that header :o) Come on get all those lovely new products & service under BETA up in the header

400 institutional quality research reports, you don't get that everyday !

Independent International Investment Research plc

(the Group)

Launch of free-to-view research product

The Group today launches The Research Oracle(TM) a new free-to-view research product, which is available via www.researchoracle.com.

The Group has launched the product as it believes that there is a significant global audience of retail equity investors that do not require the full suite of institutional services offered by the Group. In addition, the Directors believe that, with the recent milestone achievement of providing coverage for 400 global companies together with a ranking by Investars in the top-three long-only research providers over one, two, three and four years, our library of content has significant value. The Groups library, which will be progressively rolled out, runs to more than 10,000 pages of up-to-date research and the typical audience for this content is comparable to that of global premium publications such as the Financial Times, the Wall Street Journal, the Economist and Forbes Magazine. These publications typically achieve advertising rates in the order of US$90-120 CPM (per 000 impressions).

The new website, www.researchoracle.com, will publish the Groups content concurrently with its professional distribution channels including Reuters, Thomson, Bloomberg, Factset, Capital IQ, and BNY Convergex, under a licence permitting use by a non-professional audience only. The Group has entered into an arrangement with an advertising sales network provider to source advertising clients and in addition, has recruited a dedicated media sales manager who will be responsible for developing site traffic and advertiser relationships. The Directors believe this product is innovative in that it combines the advertising revenue model, which has been successful in other business areas, with an equity research product. The Directors also believe that the launch of this product will generate additional revenues to those currently derived from the Groups existing institutional clients, since those clients require delivery of research through specific channels.

The Research Oracle is designed to provide a free platform and delivery portal for the Groups products and services, as well as a high-traffic showcase for the Groups complete product suite The site will allow retail and institutional investors to subscribe for the complete suite of the Groups products which comprise:

GEO Monitor, our service which tracks and provides preliminary pre-IPO research on all non-US upcoming IPOs from around the world;

PDF-based (advertising-free) Global Research reports for internal use or for redistribution by professional/institutional clients;

The financial models that drive the ratings and recommendations embodied in the reports;
Access to the analysts responsible for the reports;
White-labelled or co-branded reports;
Bespoke research services;
Alerts registration, for notification by email upon any update of a company in the registrants interest list; and
Also being launched today, a short term actionable trading strategies product which includes a subset of the companies currently under fundamental research coverage.
In order for the Group to be able to provide the short term actionable strategies product, it has entered into a collaboration agreement with TradingCentral SA, a highly regarded Paris-based firm. Under the terms of the agreement, TradingCentral SA will provide a short-term (5-30 day) view of opportunities available in a subset of the stocks covered by the Group in our usual 6-24 month investment horizon. TradingCentrals recommendations are tracked and evaluated by Investars and their complete short-term long recommendation portfolio, from which the coverage for our site will be selected, has achieved a ranking similar to that of IIRs own long-term long portfolio. This short-term actionable trading strategy product will be provided to existing and new subscribing clients at no additional charge.

The Group is pleased to begin 2008 with the announcement of these exciting new services and hopes to announce further product launches in the near future.

Further enquiries:

Independent International Investment Research plc

Shane Smith

Tel: 020 7232 3090

John East & Partners Limited

Simon Clements/Simon Fox

Tel: 020 7628 2200

The above is more detailed than the news item on the company website. I think it has maybe been posted on the integrity research thread by mistake.

I like the header on this thread - Except it should have clarified that this share was to fly DOWNWARDS!
UC.