Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:
Small-Cap With Big Promise by Mark Veverka
Summary: It's not easy competing with such high-end video conferencing giants as Cisco (NASDAQ:CSCO) and Hewlett-Packard (NYSE:HPQ), but start-up Telanetix (TNXI.OB) is doing just that, and succeeding. In January, the small cap outfit beat them all to a major contract from Mercedes-Benz USA. Telanetix produces software that can run on its competitors' hardware, providing full-size, high resolution images, audio and data on flat-panel screens. Last week, it enticed large corporations to lease systems at a low $1,000 per month. Analyst Joe Noel of Dutton Associates believes that this attractive offer could mean many more big contract wins and possibly a bid for the company by Cisco or HP. He predicts annual earnings of $0.18 a share and sets a price target of $5; shares were trading around $3.95 late Friday. Bottom Line: Even in the absence of a takeover offer, "this small-cap could get big in a hurry."
TNXI.OB 1-yr chart