Meeting the Market Bulls

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Channel executives are talking and Wall Street likes what it hears.

Indeed, executives from integrators, consulting firms and data management companies have spoken at several investor conferences over the past three weeks. Much of the chatter has drawn positive attention from financial advisors.

MPS Group Inc., for one, apparently made a good impression during a financial analyst conference in Orlando on March 3. A day after MPS CEO Timothy Payne and CFO Robert Crouch spoke at the event Bear Stearns upgraded MPS shares to “outperform” from “perform.” Separately, MPS’s technology services division, Modis Inc., recently won a staffing contract with the University of Texas Medical Branch at Galveston, though specific financial and technical details are undisclosed. The contract and financial chatter lifted MPS shares 8.92 percent for the week ended March 5.

MPS wasn’t alone. Our Ziff Davis Channel Zone Stock Index last week rose 2.19 percent to 1,165.51, easily outperforming the DOW Jones industrial average (+0.1 percent), NASDAQ composite (+0.9 percent) and S&P 500 (+1.0 percent) during the period. In addition to MPS, our index’s big winners included Acxiom Corp. (ACXM, +9.39 percent), Ciber Inc. (CBR, +8.63 percent), DiamondCluster International Inc. (DTPI, +6.87 percent) and Affiliated Computer Services Inc. (ACS, +6.22 percent).

Investors cheer Acxiom acquisition

Investors cheered as Acxiom acquired Consodata’s European operations from Seat Pagine for $37.5 million. Consodata owns and maintains consumer lifestyle databases across England, France, Spain and Germany. This is Acxiom’s second major European acquisition in recent months. The company purchased Claritas’s European operations in January. Based in Little Rock, Ark., Acxiom believes the databases will help its customers to more effectively market products in Europe.Separately, I hear Ciber Inc. has won a contract with a southeastern state to install CRIMES (Case Records Information Management and Exchange System), an application suite that allows attorneys to quickly generate legal documents and more easily manage their workload. A similar CRIMES project is underway in Minnesota.

Still, the news wasn’t all good last week. Of our 30 index members, shares in 10 declined. The biggest dips came at Agilysys Inc. (AGYS, -4.67 percent) and Pomeroy IT Solutions Inc. (PMRY, -2.89 percent). Neither company announced any major news during the week, though Pomeroy was recently named Cisco Systems Inc.’s Direct Value Added Reseller (DVAR) of the year in the southeast region.

Eye on the index

Looking ahead, keep a close eye on Titan Corp. shares (TTN), which will be under pressure amid a U.S. Justice Department probe. The probe, which Titan confirmed after the markets closed on Friday (March 5), involves alleged bribes by its consultants. The investigation may threaten Lockheed Martin’s proposed $1.8 billion buyout of Titan, according to Reuters. Titan shares fell less than 1 percent last week, but they could slide this week as investors react to the probe.About this Column:The Ziff Davis Channel Zone Stock Index tracks 30 channel-related stocks on a weekly basis. We don’t recommend buys, sells or holds. Rather, the index seeks to measure the channel’s financial health. We launched the index on Oct. 24, 2003 with a value of 1000. Each stock in the index is equally weighted. For example, if one stock rises 5 percent and another falls 4 percent, the net result is a 1 percent gain.

Joseph C. Panettieri has covered Silicon Valley since 1992. He is editorial director of the New York Institute of Technology . Write to him at joe_pan5@yahoo.com.