Penny Stock Pick for March 21, 2006

Symbol: KANA

Kana Software, Inc.

Company Location

Stock Information

181 Constitution Drive

Menlo Park, CA
 Phone: 650.614.8300

Fax: 650.614.8301

Current price as of close on March 20, 2006:    $1.35
Buy Opinion: $1.26 - $1.48
Short Term Sell: $1.75 - $2.10
Long Term Sell (6-12 Months): $2.53+

Shares Outstanding: 33.5 Million

Annual Sales: $45.72 Million (ttm)

 

 

KANA posted 179% Gains for our Readers!

Picked at $1.35, it hit a High of $3.77!

 

 

Company Profile
 

KANA Software, Inc. engages in the development, marketing, and support of customer communications software products.

 

It provides Service Resolution Management (SRM) software solutions, primarily knowledge-powered customer service solutions that provide information to answer customer inquiries.

 

The company’s applications enable organizations to interact with customers and partners across multiple communication points, including Web contact, Web collaboration, email, and telephone.

 

In addition, the company provides customer support, consulting services, and education services.

 

KANA Software markets and sells its products to banks, telecommunications companies, manufacturers, healthcare organizations, and government agencies primarily in the United States and Europe, as well as in Asia, through its direct sales force and third party integrators.

 

The company was founded in 1996 under the name Kana Net Works, Inc. and changed its name to Kana Communications, Inc. in 1997.

 

Further, it changed its name to KANA Software, Inc. in 2001.

  

 

Highlights

Undervalued Compared To Its Peers

Excellent Results With Large Fortune 500 Clients

Recent News Update (October 6, 2006):

Well over 100% gains for KANA for just a few short months of holding. Congratulations. While the chart and business prospects for KANA still look very positive, it's always a great idea to take some profits to lock in.

 

 

 

Product Lines

 

 

eService and eMail Solutions

KANA customers have realized exceptional ROI with KANA email and eservice applications, decreasing service costs by 50%, achieving a 96% first call resolution rate and increasing cross-selling success by 14%.

  • KANA Response for email management - The recognized leader in high volume email response management, KANA Response delivers powerful rules-based automation that dramatically improves agent productivity, increases response consistency and scales to manage exponential growth in email volume.

  • KANA Response Live for chat and collaboration management - Intelligent routing, pre-formatted replies and real-time queue monitoring enable contact centers to improve speed-to-resolution for live collaboration escalations from customer self-service.

  • KANA Secure Messaging - KANA overcomes the limitations of email encryption with a solution that allows consumers to benefit from the simplicity of email, while satisfying strict legal and government requirements for consumer privacy.

Call Center Solutions

Streamlined case management across channels, automated resolution guidance and step-by-step service scripts have made it possible for KANA customers to decrease customer service costs as much as 50%, achieve 80% resolution on first contact and reduce average handling time by more than 10%.

  • KANA solutions for case management — A universal desktop manages call center cases, delivers one-stop access to enterprise data and seamlessly integrates with existing telephony and back-office systems for timely answers to every customer inquiry.

  • KANA Agent IQ — Integrated with KANA desktop solutions or other existing call center desktops, KANA Agent IQ offers a unique combination of guided knowledge management and external document search to streamline the process of resolving customer questions.

  • KANA solutions for resolution management — KANA resolution management solutions add instant value to your call center desktop with a unique combination of service process scripts and sophisticated knowledge management that automates the complete range of interactions from simple inquiries to complex service transactions.

Web Self Service Solutions

KANA solutions for Web self-service have reduced support calls on average by 20%; made it possible for agents to support more than 20,000 products; produced double-digit increases in customer satisfaction; and provided self-service around the world in 20 languages.

  • KANA Customer IQ for Web Self-Service — Proven to reduce call volume and increase customer satisfaction by guiding customers through every step of their self-service interactions from research to resolution.

  • KANA Response for Email Escalation — Customers succeed online every time with one-click email escalation for additional help with their self-service inquiries.

  • KANA Response Live for Live Chat and Collaboration — Interactive chat and co-browsing provide a gateway to richer customer collaboration with a new level of service that drives higher rates of self-service adoption, customer loyalty and online commerce.

 

 

Business News & Information

 

To read KANAs Corporate Brochure, click HERE. (This is a .pdf file.)

To read a featured case study on STAPLE'S use of KANA software, click HERE. (Also a .pdf file.)

KANA Response helped increase STAPLE'S productivity by 25%, acheive ROI in 12 months and decrease email response time.

 

 

 

Some of KANA's Larger Clients

 

Akamai

Ameritrade

Avon

Bank of America

American Express

Applied MicroSystems

Bank Boston

BarnesandNoble.com

Bertelsmann

CBOE

Bell & Howell

Boeing

Bristol-Meyers Squibb

British Telecom

Chase Manhattan

Cisco Systems

CNET

Compaq

CompUSA

Dayton Hudson

Dow Jones

Drug Emporium

Eastman

Kodak

Ebay

Estee Lauder

E*TRADE

Eddie Bauer

Ericsson

Ford

Franklin Mint

GE Capital

Gap, Inc.

General Motors

Hewlett-Packard

KLM

KPMG

Honda

John Deere

Lockheed Martin

Lycos

MCI

Merck-Medco

Mercury Interactive

Microsoft

Motorola

NEC

Nokia

Nortel

Northwest

Airlines

PeopleSoft

Sony

Siemens

Time Warner Inc.

Verizon

Volvo

Weather Channel

Williams-Sonoma

Yahoo!

 

 

Management

 

 

Michael Fields

Chief Executive Officer and Chairman of the Board

With more than 30 years experience in management of enterprise software companies, Mr. Fields has spearheaded successful sales organizations at a number of large corporations, including Oracle U.S.A, where he served as president, and Applied Data Research and Burroughs Corporation. In addition, he was a founder, chairman of the Board of Directors and chief executive officer of OpenVision Technologies, Inc, which was acquired by Veritas in 1997. Currently, Mr. Fields serves on the board of directors of Imation Corporation, and ViaNovus. He has also served on the advisory board of the Ford Motor Company Customer Service Division from 1999 through 2001. He began his career in the technology industry in 1964 in the U.S. Air Force.

 

 

John Thompson

Executive Vice President and Chief Financial Officer

Mr. Thompson has over 35 years of finance, systems, legal, and operations experience in large and small technology companies. John is responsible for KANA’s finance, legal, IT and administrative functions. He was previously CFO at several public and private companies including Veraz Networks, Interwise, Manage.Com, One Touch Systems, and Photonics. Prior to those CFO positions, Mr. Thompson held management positions at both Oracle including corporate controller and director of operations and at Hewlett-Packard including finance manager for HP’s entire computer group and division controller. Mr. Thompson earned a B.S. in Mathematics and a B.S. in Industrial Management from Purdue University and a M.S. in Industrial Administration from Carnegie-Mellon University.

 

 

 

Conclusion

 

KANA is another small company that we believe could see some exciting results for investors in the near future. Currently trading not far off a 52 week low, KANA looks poised for a rebound. We believe that as the economy moves forward, and comapnies are flush with cash, companies like KANA could see significant increases in business and revenues.

 

KANA, although a "Pink Sheet" stock, has a significant track record for a young company with dozens of large customers that are household names. We believe KANA has a fair value of over $2.50 and we believe we could see that level in the next 6-10 months. We estimate a forward P/E Ratio of just over 9. That is excellent for any stock, let alone a software company with a growth rate near 30%. KANA's share price could be much higher and not be overvalued - however, KANA will need to get off of the "Pink Sheets" for that to happen. We hope that KANA's management will work towards that goal. Just making that announcement would send the stock higher.