SaaS: Software-as-a-Service

12/10/2013 7:00 am EST

Focus: STOCKS

James Oberweis

President, Oberweis Asset Management, Inc.

Money manager Jim Oberweis, Jr. highlights two stocks that operate in the niche market for "software-as-a-service"—SaaS. In the Oberweis Report, the small cap expert looks at two players in this field.

Callidus Software (CALD) is a leading software-as-a-service provider of sales force effectiveness solutions, with more than 1,700 customers.

Its products help align sales reps' goals with the firm's goals. Since the beginning of 2011, Callidus has dramatically expanded its product offering through the completion of eight acquisitions.

This moves added functionality to its core offering in the areas of sales coaching, sales hire testing, sales enablement, learning management, content authoring, and recruitment services.

In the company's latest reported third quarter, sales increased approximately 28% to $30.7 million, from $23.9 million in the third quarter of last year. Callidus reported earnings per share of $0.07 in the latest reported third quarter, versus a loss in the same quarter of last year.

Clients of Oberweis Asset Management own approximately 75,000 shares. These shares may be appropriate for risk-oriented investors.

Fleetmatics (FLTX) is a leading global provider of fleet management solutions, delivered as SaaS.

Its mobile software platform provides fleet operators with visibility into vehicle location, fuel usage, speed, and mileage, enabling them to reduce operating and capital costs, as well as increase revenue.

As of December 31, 2012, Fleetmatics had 18,000 customers with 331,000 vehicles worldwide. The majority of their customers are small and medium-sized businesses with 1,000 or fewer vehicles.

By using Fleetmatics solutions, fleet operators gain greater control over fuel, maintenance, labor, and other costs, while improving the return on capital invested in their fleet.

In the company's latest reported third quarter, sales increased 39% to $46.3 million, from $33.2 million in the third quarter of last year. Fleetmatics reported earnings per share of $0.25 in the latest reported third quarter, versus $.19 in the same quarter of last year.

Clients of Oberweis Asset Management own approximately 32,000 shares. These shares may be appropriate for risk-oriented investors.

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