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

Another good day!! Although i know i am talking to myself on this board! Your bad luck though as this will be one of the plays of 2007 in my opinion.

Nice rise today. Looks like some resistance at 20p level which bodes well for next leg up.

What does this share have to do to get people on this board interested??? 27% rise today and still undervalued with a P/E of 10

Oh come on somebody!

I've had this on my watch list but I'm afraid that it will start to go down as it has had a good rise since Dec. Do you have a target price ?

Pumben

Because of poor liquidity it does tend to go up and down quickly! Fair value on contracted work only (excluding new business) is nearer 50p, so plenty of scope still. Plenty of info on Advfn thread. Dont leave to long if youre gonna buy, but try and get in on the dips.

jdubb

Mnay txs for prompt response. I will buy a small amount on the next dip & pray it doesn't do the usual for me. The RNS in December was very positive I just wondered whether the good news had already been factored in. sad that I watched this from 13p errrr......

I agree with the general sentiment of todays postings. This share could move forward quickly after the results and the positive comments from the CEO. The Google dispute is an added bonus

Stephanie,

apologies but when are the results, is it March or later ?

End of Feb, but they arent posted till much later in year as with most other AIM co's. Maybe a trading update at year end tho.

19% rise today! Hope you've stop lurking and bought some pumben!!!

These could go a lot higher.
They rise on any medium size purchase.
OT/Keep en eye on LED. Interim results out in Feb

Hi, just found this thread. A recent investor in IIR. I bought in at 23p earlier in the week. Looks good so far ;-)
With only 25 million shares in issue and all very tightly held, any meaningful buying or selling is going to move the price. So this could be a volatile ride
Year end is Feb and results are due July as far as I know. Anyone know different? I am looking to hold these at least until results, but I have a target of 45p and if I get lucky then I might just get the itchy sell finger.

Looks like the fun is over for now.

26 January 2007

Independent International Investment Research plc

Statement re: price movement

The Board of IIIR note the recent increase in share price of the Company since
20 December 2006. Other than the Trading Update and research note published on
that day, the Board are not aware of any reasons that have contributed to the
share price rise.

now back up to 36/40p !!!!!!!!!

Something very fishy going on.

Ian

And back down again! Roller coaster or what? Great fun.

Yes great fun!! Ive being in these since 2004 and luckily i bought a shed load when no one else wanted to know. I now hold 600000 at 15p ave. Nice way to create wealth. Roll on 1.

600,000? Respect! That's one hell of a wedge in a small company. Gamble or what? I'd like to know what gave you the confidence to put so much into one outfit. To move those out now would almost require a placing. It would certainly shift the price more than somewhat.
Up another 2p as I type. The roller coaster has started again.

Pondlife

Im a long term holder and i dont need to sell, so dont worry i wont be dumping them anytime soon!! I did my research well and added when no one else was, cos i could see the potential. Just the beginning of the ride - hold on cos we're gonna go much higher, this share is a gem!!

Glad to note your confidence jdubb. I have these on a one year view to see how things pan out. Looking at the shareholdings, these are very tightly held with very few shares openly available on the market, hence the wild swings on very small volumes. I doubt if anyone could build a wedge of 600,000 today.