ORLANDO, Fla., June 4, 2008 (PRIME NEWSWIRE) -- RedChip Independent, a division of RedChip Companies, Inc., has issued a 1Q 2008 research update for Newtek Business Services, Inc. (Nasdaq:NEWT), a direct distributor of business and financial services to small and medium-sized business.
Suman Preet Kaur, MBS, RedChip Research Analyst, reported:
"First quarter 2008 revenue increased year-over-year on the significant contributions of both the Electronic Payment Processing (EPP) segment and the Web Hosting segment. We believe the EPP segment will continue to be the core revenue generator for the Company, followed by Web Hosting. Going forward, management expects the EPP segment to post substantial revenue for the full-year 2008 because of the increasing number of processing merchants backed by the NewTracker model, which is enabling NEWT to acquire clients at a lower cost."
"In addition, SFAS 159 fair value accounting became effective on November 15, 2007, and on January 1, 2008, Newtek adopted the practices for its Capco (certified capital companies) segment. Capcos revenue recorded an increase in 1Q08 compared to 1Q07 due to higher interest rates as a result of the adoption of fair value accounting. Though management is de-emphasizing and not creating any new Capcos, they will continue to earn cash investment income on their cash balances and incur management fees and operating expenses," Preet Kaur continued.
"We reiterate our 'Buy' rating on Newtek Business Services," she concluded.
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RedChip Companies, Inc., is a well-established source of independent research and information on the small-cap market. Dedicated to "Discovering Tomorrow's Blue Chips Today," its analysts seek out up-and-coming and undiscovered small-cap companies before they show up on Wall Street's radar. To view the full version of this report, to include the investment conclusion and target price, subscribe to RedChip's Research Community online by visiting http://www.redchip.com/research/researchmain.asp or call 1-800-REDCHIP.
Disclosure:
Newtek Business Services meets RedChip Companies' criteria for independent research coverage. Neither RedChip Companies nor the analyst has received any compensation from Newtek Business Services or any other party for the writing and preparation of this equity research report. The analyst(s) contributing to this report do not hold any shares of the subject securities. This report is based on data obtained from sources we believe to be reliable but is not guaranteed as to accuracy and does not purport to be complete. As such, neither the information nor any opinion expressed constitutes an offer, or an invitation to make or garner an offer, to buy or sell any securities or any options, futures, or other derivatives related to such securities. This publication was furnished on the condition that it will not form a primary basis for any investment decision. The subject security is not a client of RedChip Companies, Inc., or any of its affiliates.