For Advent, a Time to Start Nibbling

Advent Software (ADVS ), a provider of systems that automate and integrate back-office work for investment companies, has been on the skids. Analysts' ratings range from neutral to sell. Trading at 58 a year ago, Advent has tumbled to 13. Meanwhile, SPO Advisors, a Mill Valley (Calif.) private equity fund that manages part of the Bass Group's money, has been buying, accumulating 6.1 million shares, or 19%, in the past nine months.

What's its game plan at Advent, which lost money last year and is expected to be in the red in 2003? SPO wouldn't comment, but one investor says SPO is betting on a 2004 comeback, when the stock market rebounds in full force. And there is talk that Advent, with a market cap of just $424 million and cash hoard of $170 million, is takeover bait.

Pete Heckmann of investment firm Stifel Nicolaus rates the stock "underperform" with a 12-to-18-month price target of only 8 to 10. He figures Advent will stay on the ropes for the next four quarters. Its primary customers -- investment managers -- face their toughest environment in decades, he notes. Nonetheless, Heckmann agrees that, in two years, Advent could be bought out and end up a big winner.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

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