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

Yes and more still to come, I think. People willing to pay over the odds for 20,000 or more and MMs having to work hard to find the stock. Lots of buying over 50p shows confidence.

I tried to buy some this morning, but the max Selftrade would sell me over the phone was 1000 shares (even less online).
One downside was that the max they were offering to buy back were 750 shares.
With dealing costs it wasn't really worth it. Shame 'cos I like this one.

Harrycat - it is moving about quite a lot. Even for just 5,000 shares, buyers are paying above the spread. On Friday I could sell almost any amount, but could buy only 1,000 on line with Barclays. This morning I couldn't buy or sell more than 1,000 on line for a time.

Pond
How many shares do you hold and at what ave?

See post no.15
I bought in recently just after the big spike started. I paid 23p and hold a whole 10,000 - not in your league! Even so, it's still enough to buy a few beers! If only it was always this easy.

Nice profit tho! Itchy finger yet?? Good info on A.D.V.F.N if you wanna know why you should hold!!

Yes, I've been tuning in. It was a poster on ADVFN on another thread that I frequent that drew my attention to IIR. I think Iowe him a beer.

Wasnt Illiquid was it? He sold out long ago! Im Rob67 on ADVFN by the way

I thought as much, can't be too many people holding as many shares as you. I post under 'Lord Gnome' everywhere other than here. I was Lord Gnome on here as well, but had to change my name when my subscription was upgraded for some obscure reason. I can't remember who the poster on ADVFN was, so I can't thank him. It was someone posting on either the VPC or MXP threads - my other passion is oil shares!

Small bout of profit taking seems to be over, are we on our way north again?

yep

Nice rise today again!!

Indeed. I went out for the day and came back to a nice surprise. If I had been watching the screen all day I would have been devastated by the pullback from the dizzy heights it reached. Moral - don't get wrapped up in screen watching all day.

Agreed Pond cos no doubt it will get back there anyway!! (hopefully)

y the massive drop !!!!!

A few sellers are now out! They must have got nervous which is ridiculous given the positive noises from the company. Dont try to trade this stock as you will get your fingers burnt. Buy and hold for medium term. People who sold today at 30p will regret it soon imo

they're already regretting it !

Too right Queen!! Will break thru recent highs on any positive news. Rumours that there will be a TU soon .

well we had to get rid of the weak holders at some point - couldnt carry on forever like that. Back to business as usual now I reckon, knocking on 60p's door sooner rather than later !

Nice to be blue in such a sea of red!! Shows real strength imo.