At last: investment research on small caps

Stuart Corner
Tuesday, 25 October 2005 19:39

IT Industry - Deals

A new investment research company, MicroEQUITIES' has been formed to investigate and research investment opportunities in 'micro cap' companies listed in the Australian Stock exchange.

The company claims to provide "value adding professionally elaborated extensive research within an area of huge investment potential but poorly covered by Australia's investment banking community."

It has released its first research report, into web hosting company Hostworks. It concludes that  Hostworks is worth $0.29 per share and estimates that Hostworks will achieve a 150 percent net profit growth for the next financial year (2005/6).

In the opinion of MicroEQUITIES' analyst, Carlos Gil, "the web hosting outsourcing trend will continue, companies will intensify and expand the breath of services required from web hosting providers, as the complexity and functionality of web pages increase, so too does the technical expertise required to manage those services".

MicroEQUITIES expects Hostworks to at least match the industry expected growth of 20 percent for the year 2006. "We think that Hostworks will be assisted by not only industry growth, but also by significant increases in the value of renewal contracts for current clients, who expand the range of services contracted to Hostworks," Gil said.