A curious thing happened after Apr. 24, when software maker Informix (IFMX ) announced the sale of its database business to IBM for $1 billion: Informix stock tumbled from 7 to 4 in two days. The Street felt that IBM (IBM ) got the operation on the cheap. But some pros are rethinking the deal--and snapping up the depressed shares. Their logic: Informix is left with a small but fast-growing unit, called Ascential Software. IBM and German software house SAP have formed alliances with Ascential, which some analysts call a leader on "information asset management"--software that helps companies maximize the usefulness of stored data. Ascential will develop and market its products with IBM's hardware and software platforms. With SAP, Ascential's products will be resold by SAP to its data warehouse customers. Aligning with these worldwide enterprise software vendors is a big plus for Ascential, says Mark Murphy of First Albany's FAC/Equities unit.

With no debt and $1 billion in cash, or about $4 a share, "Ascential's valuation is compelling," says Vincent Muscolino of David L. Babson Technology Fund. Its peers trade at 7 to 10 times sales while Ascential trades at 2 times. Sales are expected to rise 30%, to $160 million, in 2001 and jump to $230 million in 2002, says Muscolino.

By Gene G. Marcial

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