Vignette Corporation (NASDAQ: VIGN) provides
software used to aggregate and deliver content within the enterprise and over the Internet. The firm's various program suites manage Web-based workspaces, communications with customers, document-based workflows, record keeping, and the integration of business processes. The software can be integrated with enterprise information systems, such as resource planning programs and supply chain management applications. Vignette also provides a range of consulting, maintenance and training services. The company has strategic relationships with Hewlett Packard (NYSE: HPQ), Sun Microsystems (NASDAQ: JAVA) and Microsoft (NASDAQ: MSFT).
The firm pleased investors earlier in the week, when it said it expected fourth quarter revenues to fall in the range $52-54 million. That was an upgrade from its October prediction of $45-$50 million and topped the consensus Street estimate of $47.4 million. Net income and EPS were also expected to exceed the high end of previous guidance, on both a GAAP and non-GAAP basis.
VIGN shares popped through 30-day and 50-day moving average resistance on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with one "buy" and four "holds". Analysts expect a 19% average annual growth rate, through the next five years. The VIGN Price to Sales ratio (2.09), Price to Book ratio (1.34), Price to Cash Flow ratio (12.83) and Price to Free Cash Flow ratio (11.91) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 95% of the outstanding shares. Over the past 52 weeks, the stock has traded between $11.81 and $21.63. A stop-loss of $13.00 looks good here. Note that the firm is expected to report Q4 results on January 24th, before the open.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
New Facebook share structure hints at IPO
Before the bell: Futures higher ahead of housing, jobless data
Nuclear power is on the comeback trail
