The retail buck is an elusive animal. It's hard to capture and often harder to hold. Folks who find success in the endeavor tend to be those who refuse to waste time and money re-inventing retail management wheels. There's an outfit in Scottsdale, Arizona that puts entrepreneurs in touch with such pre-existing art along that line.
JDA Software Group, Inc. (NASDAQ:JDAS) provides programs designed to help retailers operate more efficiently. Its solutions address demand and supply chain management, business process, decision support, inventory transaction support, e-commerce, inventory optimization and replenishment, collaborative planning and forecasting, space and floor planning, and store operations. The company also offers point-of-sale applications to handle back-office functions. JDA Software has more than 5,500 customers in over sixty countries.
Late last month, the firm reported Q4 results that were in-line with Wall Street estimates. It also guided 2007 EPS to $1.00-1.10
(90 cent consensus) and 2007 revenues to $358-368 million ($355.33M consensus). Management said that integration issues associated with the acquisition of Manugistics were behind it and cited "significant new sales to companies like Office Max and IKEA" as evidence of renewed momentum. JDAS shares popped through 90-day/200-day moving average resistance on the news and have since been consolidating the gain in a bullish "flag" pattern. Stocks frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend JDAS with one "strong buy", two "buys" and five "holds". The stock's P/E ratio (15.10), PEG ratio (1.01), Price to sales ratio (1.62), Price to Book ratio (1.55), Sales Growth rate (60.80%) and EPS Growth rate (33.33%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 86% of the outstanding shares. The stock is one of those used to calculate the S&P 600 SmallCap Index. Over the past 52-weeks, it has traded between $12.46 and $17.17. A stop-loss of $13.40 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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