MAXIDIGM INVESTMENT CLUB STOCK ANALYSIS Learning.

MAXIDIGM INVESTMENT CLUB

STOCK ANALYSIS

Learning

SECTOR

Pure E-Learning

Traditional Education – Higher Learning

Others

What is E-Learning

Vs. Traditional training By third-party vendor on training department Time-consuming Costly (travel, accommodation – 2/3 of total costs)

Computer based training (CBT) Web-based Deployed to mass users Cost advantage Anywhere, anytime, anything!

Industry Outlook

Total corporate training market $66 billion Traditional training still account for about 80-90% $3.5 billion spent in 2000, growing to $25 billion in

2003 Constantly evolving Highly competitive and fragmented Competition from publisher, software vendor Acceptance and effectiveness of training

Corporate Training

U.S. Dept of Education estimated $200 billion Growth in enrollment to continue 25 years and older, part-timers, female Demand from changing Technology

Traditional Education – higher Learning

Stock SelectionAge > 6 mths? P/E Ratio Mkt Cap Avg Trading 3-mth Volume Sales/Earnings Trend

(> 4 mths) (> $100 m?) (> 10,000 shares/day?) (Falling or Rising?)

Pure E-LearningsSMTF Smartforce y N/A 2000 1.66 b 529 k Rising sales/ falling EarningsDTHK DigitalThink y N/A 585.6 m 447.8 k Rising salesSABA Saba Software y N/A 573.8 m 336.1 k Rose significantly in 2000SKIL SkillSoft Corp y N/A 214 m 49 k RisingCLKS Click2learn.com y N/A 165.1 m 68.9 k Rising slowlyLTWO Learn2.com y N/A 33.1 m 351.8 k Slowed in 1999VCMP Vcampus N/A 11.5 m 54.8 k 2000 fell from 1999

Traditional Education - higher learningAPOL Apollo Group y 45.37 3.728 b 1.01 m RisingDV DeVry y 50.58 2.51 b 243.7 k Risingltre Learning Tree y 27.12 980 m 235.5 k Rose significantly in 2000edmc Education Mgt Corp Y 38.51 860 m 285.8 k Risingcoco Corinthian Colleges y 43.75 679 m 145.6 k Rose significantly in 2000ceco Career Education Corp y 35.106 670 m 169.3 k Risingesi ITT Education Services y 24.345 499.7 m 126.5 k Rising

Traditional Education - K to 12edsn Edison Schools y N/A 1.46 b 250.8 k Rising

Publisher/Schoolsschl Scholastic Corp y 21.567 1.55 b 155.6 k Rising

asis ASI Solution

Canadian Companiescty-tse or ctynfitk-tse

Impact of slowdown…

Reduction in training budget?

Higher demand for skills improvement?

Incorporated in Ireland 1989 Largest and only profitable company Comprehensive offerings – more than 1300 courses IT, business skills, project management, core competencies

SmartForce PLC - SMTF

Customers Fortune 3000 and major international companies Alcatel, Lucent, MCI, British Airways, Chase Manhattan …

(2500)

Prior to 2000, license software 2000 – internet rental model (ASP) ; hence income has been

deferred No single customer account for 5 %

Revenue Stream

1 Year 3 Years 5 Years

Sales % -14.95 7.07 24.87

EPS % NM NM NM

Dividend % NM NM NM

Quarters 1997 1998 1999 2000

MAR 26,727 39,929 40,197 28,534

J UN 29,755 44,852 47,247 36,393

SEP 35,136 35,182 50,188 45,572

DEC 45,429 42,269 60,122 57,699

Totals 137,047 162,232 197,754 168,198

Quarters 1997 1998 1999 2000

MAR 0.04 0.16 0.03 -0.23

J UN 0.05 0.09 -0.01 -0.19

SEP 0.11 0.06 0.11 -0.1

DEC 0.22 0.05 0.15 -0.03

Totals 0.42 0.36 0.28 -0.55

GROWTH RATES

REVENUE

Note: Units in Thousands of U.S. Dollars

EARNINGS PER SHARE

Note: Units in U.S. Dollars

SMTF

Founded in 1997 Tool to ‘manage’ learning Launched B2B SABA Learning exchange in 1999 Leading provider of “human capital development” & mgt solutions

Saba Software - SABA

Customers Large businesses, governments and Learning providers Cisco, 3Com, Continental Airlines, Lucent, P & G

Mostly from license fees, implementation and consulting Transaction-based revenue from B2B marketplace still

insignificant No single customer account for 10 % Profitability 2002?

Revenue Stream


Sales % 827.9 NA NM

EPS % NM NA NM

Dividend % NM NA NM

Quarters 1999 2000 2001

AUG 156 1,707 10,048

NOV 327 3,497 13,023

FEB 554 5,202

MAY 902 7,586

Totals 1,939 17,992 23,071

Quarters 1999 2000 2001

AUG -0.04 -0.63 -0.46

NOV -0.16 -0.63 -0.43

FEB -0.19 -0.46

MAY -0.45 -0.53

Totals -0.84 -2.25 -0.89

GROWTH RATES

REVENUE


EARNINGS PER SHARE


SABA

Founded in 1996, revenue 1999 Focus is custom-tailored courses (62%) More than 350 courses Partnership with EDS

Digital Think - DTHK

Customers 260 Adobe, Siebel, Deutsche Bank, KPMG, Schwab

Software licenses, development fees Profit sharing with customers from “Extended Enterprise” 50% of 2000 revenue from 6 customers! Profitability 2002?

Revenue Stream

DTHK


Sales % 485.54 656.3 NM

EPS % NM NM NM

Dividend % NM NM NM

Quarters 1999 2000 2001

J UN 283 1,174 6,262

SEP 406 2,136 8,760

DEC 468 3,178

MAR 690 4,327

Totals 1,847 10,815 15,022

Quarters 1999 2000 2001

J UN -0.28 -0.57 -0.23

SEP -0.31 -0.92 -0.68

DEC -0.87 -2.86

Totals -2.26 -4.94 -0.91

GROWTH RATES

REVENUE


EARNINGS PER SHARE


Leading provider of critical business skills (professional development)

380 courses World’s largest e-learning library for Project Management First company to be certified by PMI (PM Institute) Reseller arrangements with other learning agencies

Main customer is GTE (25% of revenue)

SkillSoft Corp - SKIL


Sales % -100 NA NM

EPS % NM NA NM

Dividend % NM NA NM

Quarters 1999 2000 2001

APR 0 198 2,114

J UL 0 890 3,639

OCT 0 1,283 5,511

J AN 0 1,820

Totals 0 4,191 11,264

Quarters 1999 2000 2001

APR 0 -2.4 -0.57

J UL 0 -1.9 -0.47

OCT -3.33 -4.23 -0.4

J AN -2.35 -3.22

Totals -5.68 -11.75 -1.44

GROWTH RATES

REVENUE


EARNINGS PER SHARE


SKIL

Largest private institution for higher learning, around for 25 years

University of Phoenix, Western International University, Institute of Professional Development, Financial Planning Inst.

Launched online Learning via U. of Phoenix More than 50 campuses and 100 learning centres 100,000 enrollments 90 % job placement rate 55% rentention rate 6% student-loan default rate

40% revenue from Europe – exposed to currency exchange risk

Apollo Group - APOL

APOL


Sales % 22.28 29.76 30.53

EPS % 24.03 29.38 38.39

Dividend % NM NM NM

Quarters 1998 1999 2000 2001

NOV 87,875 115,698 143,418 177,073

FEB 85,078 109,356 133,980

MAY 105,201 138,107 167,591

AUG 106,723 135,685 165,008

Totals 384,877 498,846 609,997 177,073

Quarters 1998 1999 2000 2001

NOV 0.13 0.17 0.22 0.32

FEB 0.1 0.13 0.16

MAY 0.2 0.24 0.28

AUG 0.16 0.21 0.28

Totals 0.59 0.75 0.94 0.32

GROWTH RATES

REVENUE


EARNINGS PER SHARE

One of the largest publicly held higher education institute Founded 70 years ago DeVry University, Denver Technical College, Keller Institute of

Management, Becker Conviser Review (CPA, CMA, CFA) 300 locations 80,000 enrollments Recently partnered with eCollege to develop e-learning Fiscal 2001 is 10th consecutive year of annual earnings

growth >= 20%

DeVry - DV

DV


Sales % 20.49 18.02 17.26

EPS % 23.23 24.13 24.94

Dividend % NM NM NM

Quarters 1998 1999 2000 2001

SEP 80,421 93,858 118,282 135,419

DEC 90,342 107,813 133,248 150,365*

MAR 92,854 110,234 130,132

J UN 89,854 108,730 125,162

Totals 353,471 420,635 506,824 285,784*

Quarters 1998 1999 2000 2001

SEP 0.09 0.11 0.14 0.17

DEC 0.12 0.15 0.18 0.220*

MAR 0.12 0.15 0.19

J UN 0.11 0.14 0.17

Totals 0.44 0.55 0.68 0.390*

GROWTH RATES

REVENUE


EARNINGS PER SHARE

Worldwide provider of training for IT professionals Corporate clients and governments Broad base of instructor-led courses Custom-designed courses for larger clients CBT offerings on CD-Rom up until 1999 (wrote off $1.2 mil in

1999) Shifting to e-learning in 2000

Learning Tree - LTRE

LTRE


Sales % 18.32 10.85 23.23

EPS % 190.65 51.39 34.1

Dividend % NM NM NM

Quarters 1997 1998 1999 2000

DEC 36,010 45,179 45,152 49,399

MAR 35,759 45,005 46,520 52,997

J UN 43,881 47,946 49,129 63,024

SEP 48,833 49,044 48,520 58,588

Totals 164,483 187,174 189,321 224,008

Quarters 1997 1998 1999 2000

DEC 0.19 0.06 0.12 0.35

MAR 0.1 0.1 0.13 0.36

J UN 0.14 0.15 0.06 0.54

SEP 0.06 0.18 0.26 0.4

Totals 0.49 0.49 0.57 1.65

GROWTH RATES

REVENUE


EARNINGS PER SHARE

Largest private operator of public schools for K – 12 in U.S. Contract with school boards; fund by pupil count Assume operational and educational responsibilities First 4 schools in 1995; now 113 in 21 states Private schools principle – dramatic results

Edison Schools - EDSN

Private, for-profit public school – new area Acceptance Success depends on academic achievements Lengthy sales cycle Profitability 2004?

Risks

EDSN


Sales % 69.16 79.92 108.99

EPS % NM NM NM

Dividend % NM NM NM

Quarters 1999 2000 2001

SEP 24,004 41,151 64,791

DEC 35,576 61,596

MAR 36,391 61,531

J UN 36,791 60,300

Totals 132,762 224,578 64,791

Quarters 1999 2000 2001

SEP -1.37 -0.46 -0.43

DEC -0.99 -0.16

MAR -1.02 -0.14

J UN -4.75 -0.2

Totals -8.13 -0.96 -0.43

GROWTH RATES

REVENUE


EARNINGS PER SHARE

Global children’s publishing and media company Children Books & magazines publishing (biggest chunk) Educational publishing Multimedia licensing and advertising Website is most visited by teachers and schools American rights to Pokemon, Harry Potter series

Scholastic Corp – SCHL

Risks

Changes in publishing industry Changes in purchasing patterns Competition from media, entertainment and publisher

SCHL


Sales % 20.34 13.22 13.34

EPS % 33.94 397.32 4.38

Dividend % NM NM NM

Quarters 1998 1999 2000 2001

AUG 166,600 150,200 182,500 362,100

NOV 354,800 403,200 511,300 668,300

FEB 239,000 267,300 312,800

MAY 298,000 334,000 395,900

Totals 1,058,400 1,154,700 1,402,500 1,030,400

Quarters 1998 1999 2000 2001

AUG -0.405 -0.535 -0.715 -0.31

NOV 0.755 0.905 1.15 1.47

FEB -0.095 0.005 0.055

MAY 0.41 0.635 0.775

Totals 0.665 1.01 1.265 1.16

GROWTH RATES

REVENUE


EARNINGS PER SHARE

Provide HR outsourcing for large corporations (Fortune 500) Performance improvement Employment Process outsourcing Compensation & Market Share studies

Founded in 1978, public in 1997 1996 to 2000: revenue growth at a compounded rate of 55%

from 10.6 mil to 79.1 mil

ASI Solution - ASIS

ASIS


Sales % 20.53 56.33 55.05

EPS % -11.81 9.4 32.8

Dividend % NM NM NM

Quarters 1998 1999 2000 2001

J UN 6,700 12,013 15,899 23,087

SEP 5,905 14,844 15,239 17,901

DEC 9,385 18,058 20,252

MAR 12,876 14,738 20,512

Totals 34,866 59,653 71,902 40,988

Quarters 1998 1999 2000 2001

J UN 0.07 0.13 0.15 0.32

SEP 0.03 0.14 0.03 0.15

DEC 0.1 0.17 0.11

MAR 0.13 0.14 0.22

Totals 0.33 0.58 0.51 0.47

GROWTH RATES

REVENUE


EARNINGS PER SHARE

Quantitative Analysis

What the numbers say…

Microsoft Excel

Worksheet

Technical Analysis

What the charts say…

Technical AnalysisInd:E-Learning BUY ?

MAYBE ?

SymbolCurrent

Price6-mth Return

1-Yr Return

Support Level 1

Support Level 2 Sentiment

Current P/E vs. 52 wk

range

Buy, Sell, Hold

Signal

1 SMTF SmartForce PLC $43.88 -8.59% 29.04% 43.00 37.00 Recovering N/A in 2000 Sell

2 SABA Saba Software $16.38 -22.02% -42.54% 21.00 13.00 Recovering N/A Sell

3 DTHK Digital Think $15.00 -58.33% -62.50% 29.00 15.00 Bearish N/A Hold

4 SKIL SkillSoft $16.38 17.00% -9.00% 18.00 15.00 Bearish N/A Hold

1 APOL Apollo Group $51.50 90.74% 134.09% 35.00 25.00 Bullish High End Hold

2 DV DeVry $33.44 28.61% 85.76% 28.00 24.00 Wait & See Nrear High Hold

3 LTRE Learning Tree $46.25 -24.18% 92.71% 44.00 30.00 Recovery Near Low Hold

1 EDSN Edison Schools $33.94 47.55% 182.81% 31.00 22.00 Bullish N/A Sell

2 SCHL Scholastic Corp $43.44 40.12% 35.74% 30.00 24.00 Bullish Near Low Hold

3 ASIS ASI Solution $17.25 115.63% 245.00% 20.00 13.00 Bullish Near High Buy

Pure E-Learning

Traditional Education - Higher Learning

Others

MAXIDIGM INVESTMENT CLUB STOCK ANALYSIS Learning.

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