[Excerpt from company analysis of Infomedia Limited dated 01 Apr 2008.]
Infomedia is an information technology company based in Sydney, Australia that primarily develops and supports business tools for the automotive and white-goods industries. Its products are subscription based and are targeted towards the after-sales service sector within those industries.
Its flagship product Microcat, which is an Electronic Product Catalogue (EPC), assists a service business to quicken tasks such as searching and ordering of automotive or white-goods parts. Recently, Infomedia added a service quotation system to its product offering. Named as Super Service Menus (SSM), it allows after-sales service businesses to generate service quotations. Other products offered by Infomedia are Microcat LIVE, Microcat MARKET, Part Finder and Auto PartsBridge.
Cadillac, Daihatsu, Ford, Holden, Hyundai, Kia Motors, Mitsubishi Motors, Subaru and Toyota are some of the automobile manufacturers for whom Infomedia provides its products in Asia, Australia, Europe and the US.
The franchise has been in the business of developing and supplying software for the aforementioned industries since 1991. It listed on the Australian Securities Exchange in 2000.
Infomedia shares closed at $0.405 today, representing a 51% discount to our valuation. Post the on-market buy-back, the discount increases to 56%. This represents a very lucrative margin of safety for risks that the business faces.
Diluted cash available per share is approximately equal to a generous 9% of the current share price. Diluted cash available per share should reduce after the on-market buy-back has finished.
01 April 2008
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