RE: Check it out.
VERSUS TECHNOLOGIES INC. (TSE: V; ME: V)
ON-LINE BROKERAGE, ON-LINE TRADING; A TREMENDOUS
GROWTH INDUSTRY!
Versus Technologies is the pre-eminent provider of electronic
securities trading services to the retail and institutional Canadian
marketplace. Versus' retail business is marketed exclusively in
Canada under the E-TRADE Canada name.
Growth in E-TRADE Canada has been phenomenal. 54,000
transactions for the 3rd quarter is an increase of 216% from 17,000
a year earlier and also up 33% from 41,500 in 2nd quarter '99. Total
assets in customer accounts exceeded $350 million at June 30,
1999 which is an increase of 198% from the previous year. Nearly
2800 new accounts were added in the third quarter bringing the total
number of accounts up to nearly 14,000 --- an increase of 144%
from a year earlier.
Versus/ETRADE has established strategic alliances with Carlson
Online, Mutual Fund Counsel, Internet Direct and, most recently,
i!money to allow their members direct linked access to the
E-TRADE Canada service. The Versus network facilitated the
execution of trades for approximately 12% of the combined total
number of shares traded on the TSE and ME in the third quarter.
Revenues for the third quarter were up a whopping 79% from the
same period in 1998, from $3.9 million to $7.0 million. Fiscal
year-to-date revenues are up 56%. The strong revenue growth is
primarily attributed to E-TRADE Canada's contribution of $2.7 million
---- a 350% increase from third quarter 1998. An anticipated net loss
was incurred although it was down to $1.6million from $2.4 million in
3rd quarter '98. The company continues to focus on building an
infrastructure and developing the E-TRADE Canada name. They also
have a $51.4 million cash and short term investment position as of
the end of the third quarter.
The recent alliance with i!money is a great complement to the
resources currently available. I!money is Canada's leading
comprehensive financial services marketplace and is also Canada's
leading interactive, one-stop financial services web site allowing
customers to research, compare and purchase products such as
stocks, mutual funds, GICs, mortgages and loans.
Versus/ETRADE has also recently launched its IPO Centre for
Canada. E-TRADE customers will now have the access to
participate in online IPOs in Canada. The IPO experience in the
U.S. has been fantastic and E-TRADE was a major player. Similar
opportunities, although likely on a much smaller scale, will now be
available in Canada. To this end, the company has also recently
announced an alliance with Yorkton Securities, whereby they will
distribute new issues led by Yorkton. E-TRADE will also now offer
Yorkton Research capabilities to its clients on a subscription basis.
The online brokerage and trading business is definitely in its infancy
in Canada. Versus Technologies/ETRADE Canada is at the leading
edge. The power the industry holds was briefly indicated in the
April/May time frame when online brokerage stocks went through
the roof. Versus hit a high of $28. As the markets went into their
summer doldrums these stocks quickly followed .... Versus is now
trading in the $10-$11 range. In addition to various economic
indicators greatly influencing the markets over the past few months
there were also a number of technical difficulties with some of the
online brokerages in the U.S. i.e. network breakdowns, etc.
As more and more investors get their feet wet and develop a trust in
the security, speed, cost and convenience of online trading the
industry and thus, the share value, has nowhere to go but up!
What I would do
I recommend this stock as a 'STRONG BUY'. While it will have its
volatile moments the primary direction will be to mirror the
movements of the markets which history has shown to be is a
significant uptrend. In the first half of year 2000 I can see it reaching
back to its high of $28.