For Aggressive Investors:
Symyx Technolgies |  - Co. Spotlights available via RSS feed
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This column is for investors willing to take more risk and potentially receive more reward. The stocks mentioned in this column are not recommended to buy or sell. They're brought to your attention so you can investigate them further to determine if they fit your risk profile. Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings. And some will have tremendous stories. | | SMMX | $7.20 | Why It's Featured: Company in transition to new business model. Selling at Book Value.
Danger Zones: Losses most likely for this year and next. | Trailing P/E | 18.7 | | Earn. Growth | 27.5% | | Projected Sales Growth | 12% | | Market Cap. | $242M |
June 18, 2008 - Symyx Technologies Inc. (SMMX-NASDAQ) operates as a scientific research and development integration partner for various companies in life sciences, chemical, energy, consumer products, and electronics industries in the United States, Europe, Asia, and rest of North America.
Its offerings include Symyx Software, Symyx Tools, and Symyx Research. Symyx Software consists of Electronic Lab Notebook and Vault Platform, providing a digital environment for scientists to plan, execute, record, store, back up, and share their daily research activities; Lab Execution applications to control, monitor, and manage the acquisition of large amounts of data from various instruments; Experiment Analysis applications that deliver real-time data warehousing, querying, visualization, and reporting; and Experimental Logistics enabling the chemical presentation capabilities. This software also includes Decision Support solution comprising Symyx Isentris Client for accessing and managing scientific data in a time-saving manner; Symyx Isentris for Excel for accessing and managing scientific data in the Microsoft Excel spreadsheet environment; Symyx Draw for drawing precise chemical structures and reactions; Symyx Isentris Controls to build, extend, and integrate custom scientific applications; Symyx Cheshire for defining cheminformatic business rules for various applications to perform particular operations; Symyx Core Interface for accessing essential services for managing and supporting critical application workflows; and Symyx Direct for searching and registering molecules and reactions in Oracle databases. The company's Symyx Tools designs, develops, manufactures, and sells automated instruments, including reactors, screening systems, robotics, and analytical equipment. Symyx Research provides various services, including research services, collaborations, and partnerships. Symyx Technologies was founded in 1994 and is headquartered in Santa Clara, California. Symyx has increased sales each year since 2005, starting with $108.1 million, followed by $124.9 million, then $125.1 million. This year analysts expect a jump to $170 million and next year $190 million. Earnings haven't done as well. In 2005, they were 38 cents a share, then went to 24 cents a share, followed by a negative 18 cents. This year analysts predict a negative 32 cents, and next year look for a negative 1 cent a share. Over the next 5 years, predictions are for earnings growth to average 27.5% annually on sales that average an improvement of 12% a year. The company is changing from a reliance on a few, large firms (Exxon Mobil and Dow Chemical were almost 60% of revenues), to one that has a broader account base as well as a shift in revenue sources, from a research oriented firm to a software provider. In the first quarter, Symyx Software made up a larger portion of sales thanks to the recent acquisition of MDL. The Symyx Research group, its normal heavy hitter, contributed a minority of revenues. Going forward, analysts think the Software group will make up 55% of total sales. The Tools division, 27% and Research, 18%. Driving more of the Software sales will be new products and services as well as more salespeople. The stock traded at $80 a share in 2000, then dropped to $7.50 by 2002. It rallied to $32.20 in 2004 only to hit $5.80 earlier this year. It's one of those. More numbers: Profit margin is negative but should hit positive numbers by 2010. There is no dividend. There is no debt. Current assets are 1.5 times current liabilities. Officers and directors have 7.4% of the stock while 5 institutions own 49%. There are 33.629 million shares outstanding. Average daily volume is 135,000. Book Value is $7.20. The big change for Symyx is MDL, the gold-standard in chemistry informatics. With this addition, Symyx offers leading-edge software, modular workflows and research services that maximize R&D productivity. Analysts believe Symyx management can add considerable value to the MDL franchise. Additionally, there's a trend for outsourcing R&D by chemical and life science companies that fits nicely with the products and services of Symyx's Tools and Research divisions. The company is going in new directions, adding to its customer base as well as emphasizing software over research collaboration. There's more profit in the new model. If successful, investors should have a very positive ride on what has proven to be a very volatile stock. As always, be careful out there. Company Web site: www.symyx.com - Ted Allrich |
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