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CANSLIM.net Profile: NIC Inc. provides portal outsourcing and related software and services for eGovernment, helping governments use the Internet to reduce costs and provide a higher level of service to businesses and citizens. NIC enters into contracts primarily with state governments, and designs, builds and operates Web-based portals on their behalf. The Company's portals consist of Websites and applications that it builds, which allow businesses and citizens to access government information online and complete transactions, including applying for a permit, retrieving driver's license records or filing a form or report. NIC manages operations for each contractual relationship through separate local subsidiaries that operate as decentralized businesses with a high degree of autonomy. The company has increased its earnings by +33%, +33%, +33% and +25% in the past four quarterly financial reports for Jun, Sep, Dec '05 and Mar '06 respectively. The annual earnings history (the “A”) has shown solid increases in the past three years, a 45% Growth Rate, which helps reassure investors of strength in the underlying fundamentals of the company. Return on Equity of 12% falls a bit under the +17% guideline. Management owns an impressive +38% of the float which helps align their interests with those of their shareholders.  The Computer-tech Service group is now ranked 49th of 197 Industry Groups, putting it on the edge of the top quartile, thus confirming there is decent group leadership to fulfill the "L" criteria. 

What to Look For and What to Look Out For:  Now that EGOV has reached new high territory on above average volume and has decisively passed through its pivot point, odds favor further gains. It is important not to buy any stock extended too far above its pivot point.  Investors should always look out for a failed breakout, so if EGOV fails to follow through and rolls back it would give rise to concern.  If dropping into its prior base to close under its March 20th, 2006 high close of $6.53, that would technically negate the recent breakout. Then the odds of a sustained rise and meaningful gains would be greatly reduced. Alway limit losses per the 7-8% sell rule, and never hold a stock if it falls more than that much from your purchase price.  Another concern is that, even while more meaningful revenue growth has continued on a percentage basis versus the year ago quarters, sequentially speaking, the company's sales revenues have been locked in the $15-16 million range for the past 4 reports.  Flatter comparisons in the coming quarters would likely prompt disappointment.