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Caminus: Building Up Lots of Energy for Shareholders?

Although Caminus was founded in 1998, it is actually a company with a long history. You see, the company is the result of the merger of several software firms: Zai*Net Software, Caminus Engery Ltd., Positron Energy Consulting and DC Systems.

Essentially, Caminus is a software and services provider for the energy industry. Of course, lately the energy markets have been surging. But there is another big trend: deregulation. To stay competitive, energy companies need to deploy new technologies.

Caminus's suite of software applications is called Zai*Net. With it, energy companies can perform trading risk management, credit exposure analysis, power and natural gas scheduling and analytics. In a sense, energy companies are becoming investment firms, as they must deal with such things as futures, swaps and stock options.

Caminus also provides strategic consulting. Services include long-term capital investments, deployment of operations in deregulated energy markets and the management of energy assets.

The company has been showing traction in its financials. In the past quarter, revenues increased 87% to $11.2 million (compared to the same period a year ago). Pro forma net income was $1.8 million. The company added a variety of big-name clients like BP Amoco, Cargill-Alliant and Citgo.

Although, Caminus has not stopped its acquisitions spree. The company recently purchased Nucleus Corporation, which was definitely a smart buy. Nucleus is a leading software supplier for the energy market. The company is expected to generate $3.5 million to $4 million in revenues for the rest of the year. More importantly, the acquisition will be accretive. According to the CFO of Caminus, the deal should add a minimum of $10 million in revenues in 2001, as well as 5 cents per share in cash earnings.

However, in the past few days, the stock price has surged (there was an analyst upgrade). So, it would probably be wise to wait for the stock to have some profit taking before buying.