Opinion on  Pitney Bowes Inc. (PBI)     Sector: Technology  >  Industry: Office Equipment
Pitney Bowes Still Does Not Have It

Pitney Bowes (NYSE:PBI) released impressively improving numbers. Q4 income from continuing operations is up a whopping 95%. Earnings per diluted share are up 101%. The stock is trading close to its 52 week high. It is also trading near its five year high. So is this the breakout onto new heights....

...The company's Chairman and CEO Michael J. Critelli points to “strategies to expand into higher growth segments throughout the mailstream have solidly positioned us to take advantage of the stability, flexibility, technology and partnerships that postal reform will bring. We are focused on the many growth opportunities available to us and committed to providing end-to-end, integrated mailstream solutions for our customers."...

Pitney Bowes (NYSE:PBI) pulled the trigger and is buying MapInfo (NasdaqGM:MAPS) for $408 million or approximately a 53% premium to its previous close. Moody’s gets a little upset and says maybe they have to downgrade debt because they cannot figure out if Pitney Bowes has the resources to buy back stock and make cash offers for interesting acquisitions.

Pitney Bowes has to do something to get things moving. The stock has been moving sideways for the past four to five years. 79% of shares outstanding are owned by 510 institutions. Dividend yield and huge repurchases are draining cash.

Pitney Bowes is tied to the mail delivery business with all its traditional legacy asset and process issues. The acquisition does make some sense. The big question will be can Piney Bowes properly exploit the advantages of MapInfo? There are many other map and location service providers who have more effective distribution channels. Pitney Bowes talks to the logistics side of businesses and does not have any experiences or insights into the front end retail customer action.

We need management to make some public comments as to how this fits into their vision of the future and more importantly just what is their vision of the future.