Technology An Overview of Current Holdings and Future Prospects

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TechnologyAn Overview of Current Holdings and
Future Prospects

• Mike Winkler
• Samantha Mills
• Anh Do
• Scott Dolina

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Current Holdings

• Electronic Data Systems
• Current Value 12,811.50
• Return to Date -10.68
• American Management Systems
• Current Value 2,457.00
• Return to Date 39.40
• Invision Technologies
• Current Value 38,820.00
• Return to Date 27.05

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Electronic Data Systems

• Industry Sector Information Technology Services
• Exchange NYSE
• Ticker EDS
• Price 20.76
• Provider of traditional information technology
  and business services outsourcing services
• Primary Focus Design, construction and
  management of computer networks, information
  systems, information processing facilities and
  business processes.
• A.T. Kearney premier management consulting
  division

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Electronic Data Systems

• Relative Valuation

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Electronic Data Systems

• Valuation by Key Multiples

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Electronic Data Systems

• Buffet Valuation

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Electronic Data Systems

• Key Issues
• Negative earnings
• Size difficult to value appropriately
• Internal Problems
• Unexpected losses on long-term contracts
  especially with the Navy
• Liquidity issues
• 50 reduction in contract signings during the 4th
  quarter causing 2004 profits to be further
  depressed.

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Electronic Data Systems

• Conclusions
• Overvalued
• Recommendation
• Sell total cash inflow of 12,811.50

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American Management Systems

• Industry Sector Business Software and Services
• Exchange NASDAQ
• Ticker AMSY
• Price 16.32
• Global firm providing business consulting, system
  integration, and outsourcing services
• Primary Focus Enterprise resource planning,
  credit risk management, customer relationship
  management, and enterprise security
• Target Markets Governments, Communications/Media,
  Financial Services

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American Management Systems

• Relative Valuation

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American Management Systems

• Valuation by Key Multiples

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American Management Systems

• Valuation excluding nonrecurring charge

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American Management Systems

• Buffet Valuation

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American Management Systems

• Key Issues
• Customer loyalty 30 above industry norm
• Contract generation stable
• State of New Jersey - Child welfare management
  info system
• U.S. Navy Seals Mine warfare systems
• Strategic alliance with ID Analytics to provide
  anti-fraud solutions for U.S. government
• Internal Reorganization and Strategic Refocus
• Consolidation of LOBs into commercial and public
  sectors
• Strategic alliances to broaden software products
  distribution and installation
• Major expansion of management services division
• New operational metrics to judge performance

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American Management Systems

• Conclusions
• Undervalued
• Recommendation
• Maintain current holdings and consider additional
  investment

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Invision Technologies

• Intrinsic Value
• Based on multiples valuation 65.55
• Based on Buffet valuation 78.93
• Current Margin of Safety
• Based on multiples valuation 41
• Based on Buffet valuation 51

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Undervalued Prospects

• Take 2 Interactive Software
• Storage Technology Corporation
• Radiant Systems

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Take Two Interactive Software

• Industry Sector Technical and System Software
• Exchange NASDQ
• Ticker TTWO
• Price 30.71
• Integrated global developer, marketer,
  distributor, and publisher of interactive
  entertainment software games for
• PC, PlayStation, PlayStation2, Nintendo Game Boy
  Color, Nintendo GameCube, Nintendo Game Boy
  Advance, and Xbox
• Popular Titles Grand Theft Auto Vice City, Max
  Payne, Mafia, The Italian Job, Mall Tycoon,
  State of Emergency

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Take Two Interactive Software

• Relative Valuation

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Take Two Interactive Software

• Valuation by Key Multiples

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Take Two Interactive Software

• Buffet Valuation

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Storage Technology Corporation

• Industry Sector Data Storage
• Exchange NYSE
• Ticker STK
• Price 29.51
• Designs, develops, manufactures, and markets a
  range of storage solutions for digitized data
• Storage Products Tapes, disks, and network
  products
• Storage Services Maintenance and support,
  business continuity, and
  disaster recovery
• Target Markets Multi-national corporations,
  midsize and small businesses, universities,
  medical institutions, and governmental
  agencies

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Storage Technology Corporation

• Relative Valuation

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Storage Technology Corporation

• Valuation by Key Multiples

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Radiant Systems

• Develops, installs, and delivers solutions for
  managing site operations for retail and
  hospitality businesses
• Centerpiece product Radiant 6E Site Operations
  Solution
• February 2004 Recent spin-off of software
  business, Blue Cube Software

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Final Analysis
Most Overvalued Holding Electronic Data
Systems Most Undervalued Holding American
Management Systems Future Prospects Take
Two Interactive Software Storage Technology
Corp. Radiant Systems Spin-Off