MGI Research

Wednesday, Jan 16th

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MGI Quant

Utilizing the MGI Index and MGI Change Vector in combination with key valuation metrics, MGI Quant helps improve the accuracy of company assessments and provide an independent benchmark of overall company performance. Investors and company executives use them to identify areas for improvement in valuation, operating performance, and bottom line results. MGI core quant data is a major input into MGI Advisory Services and Benchmarking engagements. MGI Quant scores are available for over 500 global technology vendors, and are updated on a continuous basis. Unlimited access is available by Subscription, and select research notes are available in the Research Store. Subscribers get priority access to all published research and data as well as analyst consultation.

DELL Go Private Deal - a Reality Check

Historical Valuation Multiples (EV/Sales) of Large Hardware CompaniesThe circumstances surrounding DELL go-private transaction are beginning to erode the company brand equity with enterprise buyers. The Dell Special Committee evaluating offers from a group led by Michael Dell and Silver Lake private equity fund and one from a group led by Carl Icahn and Southeastern Asset Management is under pressure to clearly articulate what is in the best interest of current shareholders, assess the opportunities, spell out the risks and communicate those clearly to holders.

The DELL buyout transaction appears in serious trouble. Both the Michael Dell offer and even the Carl Icahn offer of cash and a stub have failed to stimulate investor animal instincts. The investor apathy translated into a lack of votes and thus postponement of two shareholder meetings.

Cloud Stocks Lagged Market Benchmarks in 1H2013

Cumulative Performance of MGI Cloud30 Index - June 27 2013Given all the industry noise around cloud computing, it may sound counterintuitive that cloud stocks have had a tough first 6 months (almost) in 2013. As of June 27th 2013, year-to-date the MGI Cloud30 Index – a composite of 30 leading cloud companies, has significantly underperformed the broader market averages - up 4.38% vs. 22.42% for the S&P 500. The average cloud equity advanced during the period by only 3%. Breadth has been neutral with half the companies (15) recording a positive performance and half falling during the period. The best performer was Medidata (MDSO), up 93% YTD, with the worst performer being Rackspace (RAX), down almost 49%. However the overall longer term trend for MGI Cloud30 index continues to be up. The cumulative outperformance of MGI Cloud30 vs. the broad market benchmarks like S&P500 also remains dramatic. Since inception in December 2009, MGI Cloud 30 Index is up +126.35% vs. S&P500 is up +49.21%...(more)

MGI Cloud30 Index - Is the Cloud Trend Intact?

MGI Cloud 30 IndexCloud computing has emerged as one of the most dominant and disruptive trends in technology and is the underlying enabler of both social networking and mobile computing. Since late 2009, we have been tracking an index of 30 equities of companies that in our view are strong proxies for the cloud computing trend. In this research note we revisit MGI Cloud 30 Index basics and review its performance. For details, please click here.

Large Systems Vendors Scorecard: October 2011

Our current, October 2011 vendor scorecard provides a qualitative rating for large systems vendors such as Hewlett-Packard, Oracle, Dell, IBM, EMC and Cisco. The note contrasts these ratings with quantitative MGI Index scores measuring business model efficiency and with growth and valuation parameters. The recent upheaval at HP provides an interesting backdrop to our rating scores. With a drop in HP stock, a number of analysts and investors have been turning positive on the company. We think that such enthusiasm is a bit premature. HP's stock is cheap for a reason. In a related research note: "Who Benefits from HP Disarray?" we analyze the opportunities and threats for HP and its peer group.
Attachments: (For Subscribers)
Download this file (MGI Scorecard - Large Systems Vendors Oct 2011.pdf)MGI Scorecard - Large Systems Vendors Oct 2011

MGI Research Score Snapshot - Microsoft Corp

For all the power of the Microsoft franchise, there has been little doubt that the company has been struggling during the past several years as is well reflected in the surprisingly modest MGI-X scores. Importantly, though, our predictions of improvement in MSFT economics and business cycle are generating confirmation indicators and beginning to bear fruit for investors. Although the shares have broken out above the $28-$29 price range we discussed in our note of September 17th, we continue to view the shares as attractive. MSFT is announcing Dec 2009 earnings on Jan 28th 2010.

Attachments: (For Subscribers)
Download this file (MGI_Research_MSFT_Sep_2009.pdf)Microsoft MGI Index Update for Qtr Ending Sep 2009

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