SecureNet - A straw Hat In Winter

It might be time to buy SXN as it is a stock in a sector that has been consigned to the proverbial leper colony of indifference.

Yes ... I am talking about that despised and out of favour technology sector.

Secure Net still has a few problems to overcome - like turning a profit !!!

This is another reason why this stock has been slammed from its high this year of $1.84 to its current price of around 82c. Expectations are for SXN to report a full year loss of around 2 to 3 million dollars.

So why even loook at a "tech wreck dog" like SNX?

Some reasons why SNX is attractive at current levels:

1. Money ... SNX has about $90 million in cash - that equates to over $1.00 a share !!

2. SNX expects to turn a profit in the second half - so, is it turning the corner?

3. Indications are promising as SNX ( which deals in encryption technology, all facets of security for e-commerce in relation to internet banking and the like) is becoming a major company in I.T. security not only in Australia.

4. Its expansion into Asia should see revenues begin to return from SE Asia, China & Japan sometime in the next year or so.

5. 2003 should see SNX trading profitably .... so much so that, with its healthy cash position and expanding business, the company could end up on the takeover menu of some "larger fish". After all, SXN only has some 76 million shares on issue and its share register looks vulnerable.

So is SNX a "straw hat in winter" ... one to buy now and profit from later?

Probably "yes" ... but they could go even lower in this climate.

I was happy enough to pick mine up at 80 - 82c.

It's now just a matter of patiently waiting.

Cheers, X