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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowI don’t often write about individual stocks, and it’s especially rare for me to discuss small companies.
There are two reasons for this. First, a majority of my trading focuses on exchange traded funds, which are baskets of stocks that trade like individual issues. And the second is, individual stocks carry more risk, and I am all about cutting risk as much as possible.
Occasionally, a small, relatively unknown company will grab my attention, and I’ll feel the need to share it with you. Today, that stock is one many of you have at least heard of, and possibly even owned at one point. I also will bet you don’t own it anymore.
The company is Interactive Intelligence. It’s almost unknown outside Indianapolis, and it definitely falls in the small-cap category. The market value of the company is about $100 million.
Interactive Intelligence is a technology company that came public in October 1999, only months before the beginning of the second-worst bear market in U.S. history.
Shares traded from $20 all the way up to $45 in a few months, before collapsing to less than $2 a share by fall 2002.
It was about that point when several technology stocks that came public in the late 1990s went bust. Interactive Intelligence, however, kept on fighting. The stock didn’t begin to do much for another year or so, but the company survived.
Interactive Intelligence makes communications software that simplifies and integrates the delivery of messages sent via phone, e-mail or fax. When I talked to CEO Don Brown a year and a half ago, I got the impression the company could solve one of the world’s big problems: call center hell!
When many of us call our bank, for example, we enter account information on the keypad, then speak to someone who can’t help us, and get transferred. Then the next person asks for our account info and our problem again. This process can be repeated until the bottle of Jack Daniel’s we grabbed is empty.
Don told me his software eliminates this problem by remembering the account info and problem, and putting that information in front of everyone we speak to. So each person doesn’t waste our time asking the same questions. Brilliant, and a long time coming.
Investors lately seem intrigued. In late 2003, the stock finally broke out of the $2 range, busting up to $6 and change in 2004. It fell below $3 in late 2004 before rebounding again. On Sept. 21, it was trading at $7.37, up 21 percent for the month and 63 percent for the year.
A lot of overhead remains from the 2000-2002 period, and that will take time to push through. Keep in mind that the overall stock market is going to get more challenging until it peaks in about four to seven months.
There is a decent chance the stock will get smacked right back into the $4 range, and sit there another two years. But its recent movement makes it at least worth a look.
Hauke is a local money manager. His column appears weekly. Views expressed here are the writer’s. Hauke can be reached at 566-2162 or at keenan@samexcapital.com.
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