The size of a businesses profit is a function of the efficiency with which sales and operational data can be collected and analyzed. There is an outfit in Columbia, Maryland that helps companies at the hospitality end of the spectrum with that sort of thing.
Micros Systems (NASDAQ: MCRS) is a leading developer of enterprise applications designed for the hospitality and specialty retail industries. The firm provides hardware and software for point-of-sale and operational applications, as well as a suite of inventory, labor and financial management back office programs. The systems operate locally and across the enterprise, allowing management to analyze demand through detailed tracking of inventory, orders and reservations. Customers include Hilton Hotels (NYSE: HLT) and Marriott International (NYSE: MAR).
The firm pleased investors last week, when it reported fiscal Q4 EPS of 75 cents and revenues of $221.6 million. Analysts had been looking for 70 cents and $219.8 million. Management also guided Q1 EPS to 50-52 cents (49 cent consensus), Q1 revenues to $201-$204 million ($202.70M consensus), FY08 EPS to $2.59-2.62 ($2.56 consensus) and FY08 revenues to $910-$915 million ($905.47M consensus). Ferris Baker Watts subsequently reiterated its MCRS "buy" rating.
The stock popped on the news and has since settled into a bullish "flag" consolidation pattern. Equities 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 the issue with five "strong buys", three "buys" and two "holds". Analysts see a 20% growth rate, through the next year. The MCRS Price to Sales ratio (3.13), Price to Book ratio (4.44), Price to Free Cash Flow ratio (24.21) and EPS Growth rate (41.51%) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 95% 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 $48.10 and $61.48. A stop-loss of $52.50 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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