All you who want to get out, by all means get out and let me benfit from the stocks ascent when they report better than expected earnings. We have seen it his above $15 on buyout speculation, now it will hit it again on its own results.
Israeli Technology and Communications
Alvarion Ltd. (ALVR: $13.13, Positive)
3Q Earnings Preview
In this note we preview ALVR's 3Q earnings. We are maintaining our numbers for 2H07 and 2008, and adding 2009 estimates to our model. We also maintain our thesis that ALVR has a defensible position in the WiMAX access market, and that the company is on track to grow into meaningful operating leverage.
HIGHLIGHTS
Maintaining estimates; adding 2009 estimates to model. We are maintaining our thesis that Alvarion will be able to meet or exceed our numbers of $59.2 mln and $0.04 for 3Q. As mentioned in previous reports, we are modeling significant leverage over the next six quarters, and expect operating margin to reach 4.6% in 2008, and 8.8% in 2009. We expect 26% Y/Y growth in 2008 and 25% Y/Y growth in 2009, based on WiMAX revenue growth of 50% and 42%, respectively, and flat non WiMAX revenue. Positive Factor Cisco's acquisition of Navini is positive for industry and a net neutral for ALVR. Last Tuesday, Cisco announced its acquisition of privately held Navini Networks for $330 mln. This acquisition was rumored in the market for sometime, appearing in Unstrung on October 15. We believe that this acquisition is a positive for the industry, reaffirming Cisco's commitment to WiMAX; we would also point out Cisco's intent to address emerging markets (meaning fixed WiMAX). We view this acquisition as neutral to Alvarion. While
ALVR has been partnering with Cisco, we would note that it has been ALVR bringing Cisco in for network components, so this does not represent the loss of a channel. Furthermore, we believe that mutual current deployments and trials will continue as planned, and that ALVR and Cisco may selectively work together in the future. Lastly, while Navini has a WiMAX product, its installed base is still deploying proprietary technology. Neutral Factor WiMAX hype may have cooled, but ALVR's near-term performance is not dependant on mobile WIMAX and/or any specific deployment. The resignation of Sprint's CEO may have cooled WiMAX hype, especially as it came on the heels of a successful and highly publicized WIMAX World. Again worth noting, ALVR is not
a part of the Sprint roll-out, and does not expect any meaningful revenue from mobile WiMAX in the next six quarters. Positive Factor
Valuation. Shares of ALVR trade at 44x our 2008 estimate of $0.30 and 22x our 2009 estimate of $0.60. PEG ratios are 0.4 and 0.2, respectively.
CONTRA CASE
The main risk to our thesis on ALVR lays in market perception and eventual uptake (not expected until 2H08 of mobile WiMAX services once those are offered.
Monday, October 29, 2007
Sunday, October 28, 2007
Alibaba!!! How to Play it on the way UP!!!
Global Source (GSOL) is the best way to play Alibaba seeing how most investors do not have access to the Hong Kong market and what is turning out to be the most heavily anticipated IPO of the year after (VMWare aside).
As all of you no doubt have noticed, Alibaba is set to start trading November 6th. The books closed earlier than scheduled in Asia and the U.S. NO surprise that it is MASSVILY oversubscribed and will no doubt price at the top of the range 13.50 HK dollars if not higher ($1.74 USD).
Enough about Alibaba and the price numbers for now and consider the P/E ratios and where Global source fits into the pie. Alibaba’s P/E multiple is currently at 55 2008 earnings. Global Sources P/E is at 34!!! That is unbelievably cheap considering it is a Chinese growth stock that is also in B2B business. A great comparison to Alibaba. Hey its even got 10% of the B2B market, while Alibaba dominates with 70% mkt share. Hummm.
http://online.wsj.com/article/SB119360839052074184.html?mod=hps_asia_whats_news
Earlier this week on CNBC David Faber gave a break down of the Alibaba deal and as soon as he mentioned Global Source, the stock took off. Now, Global source has already been on a tear since it has been mentioned in releases tied to Alibaba Oct 5th. Now, chances are (as David Faber so delicately put it) Alibaba will probably open in the high 20’s (HK Dollars).
http://www.cnbc.com/id/15840232?video=573782444
This will award it a 110 P/E!!!!. BIDU has a P/E of 83 (210 trailing PE) and you have witnessed its ascent! Give that global sources P/E is significantly lower than Alibabas and Bidus, Global Source could easily command one at 100. This would easily give it a 10-15 point upside. Listen, it is a volatile market where speculation is the name of the game and a move like this is not beyond any stretch of the imagination.
If you’re still not convinced, there is a recent article that will appear in tomorrows Wall Street Journal underlying investor’s appetite for China. E-House P/E 87, Home Inns & Hotels P/E 250, Longtop Financial P/E 85, and the Solar’s Yingli and LDK both TRIPLED since their IPO. If Alibaba does anything like these Chinese mentioned Issues than I suspect it reaching a P/E vastly higher than 110.
http://online.wsj.com/article/SB119360779520974156.html?mod=hps_asia_whats_news
Watch it rise, or take part in the profit. Either way, it’s an interesting trade. Would not be surprised if one of the trading masters, or what ever you want to call them on Fast Money, or even our wacky friend Jim Cramer (recommended it 10/17/2007) brings up Global Source. The odds are in your favor. Risk/Reward is high, and downside is not that much. It’s got a low float, NO DEBT, $4 a share in Cash. It has a 104% Net Income growth and 39.5% sales growth over the past year. And, if you read through their reports you’ll see that they are poised for further growth with their sourcing fairs. Yes, I am long the position; I have been since the beginning of October and after rereading this post, I might just hang on the Global Source for a much longer time. Think about it.
As all of you no doubt have noticed, Alibaba is set to start trading November 6th. The books closed earlier than scheduled in Asia and the U.S. NO surprise that it is MASSVILY oversubscribed and will no doubt price at the top of the range 13.50 HK dollars if not higher ($1.74 USD).
Enough about Alibaba and the price numbers for now and consider the P/E ratios and where Global source fits into the pie. Alibaba’s P/E multiple is currently at 55 2008 earnings. Global Sources P/E is at 34!!! That is unbelievably cheap considering it is a Chinese growth stock that is also in B2B business. A great comparison to Alibaba. Hey its even got 10% of the B2B market, while Alibaba dominates with 70% mkt share. Hummm.
http://online.wsj.com/article/SB119360839052074184.html?mod=hps_asia_whats_news
Earlier this week on CNBC David Faber gave a break down of the Alibaba deal and as soon as he mentioned Global Source, the stock took off. Now, Global source has already been on a tear since it has been mentioned in releases tied to Alibaba Oct 5th. Now, chances are (as David Faber so delicately put it) Alibaba will probably open in the high 20’s (HK Dollars).
http://www.cnbc.com/id/15840232?video=573782444
This will award it a 110 P/E!!!!. BIDU has a P/E of 83 (210 trailing PE) and you have witnessed its ascent! Give that global sources P/E is significantly lower than Alibabas and Bidus, Global Source could easily command one at 100. This would easily give it a 10-15 point upside. Listen, it is a volatile market where speculation is the name of the game and a move like this is not beyond any stretch of the imagination.
If you’re still not convinced, there is a recent article that will appear in tomorrows Wall Street Journal underlying investor’s appetite for China. E-House P/E 87, Home Inns & Hotels P/E 250, Longtop Financial P/E 85, and the Solar’s Yingli and LDK both TRIPLED since their IPO. If Alibaba does anything like these Chinese mentioned Issues than I suspect it reaching a P/E vastly higher than 110.
http://online.wsj.com/article/SB119360779520974156.html?mod=hps_asia_whats_news
Watch it rise, or take part in the profit. Either way, it’s an interesting trade. Would not be surprised if one of the trading masters, or what ever you want to call them on Fast Money, or even our wacky friend Jim Cramer (recommended it 10/17/2007) brings up Global Source. The odds are in your favor. Risk/Reward is high, and downside is not that much. It’s got a low float, NO DEBT, $4 a share in Cash. It has a 104% Net Income growth and 39.5% sales growth over the past year. And, if you read through their reports you’ll see that they are poised for further growth with their sourcing fairs. Yes, I am long the position; I have been since the beginning of October and after rereading this post, I might just hang on the Global Source for a much longer time. Think about it.
Wednesday, October 3, 2007
EFUT, Poised To Continue Its Ascent!
If you check out some of the other Chinese stocks out there traded here in America, JRJC, CHNR, RCH, CDS, WX, EJ, and KUN you will notice that they are all up on average 300-400% in the last 10 days!!!
EFUT, is only up around 95% over the last few days and is Poised to Sky Rocket in the next few days for a few Key Reasons. All you longs…. Hold on Tight!
-On Oct 2nd there was a buy in alert on the stock of about 219K shares,
http://www.tradingmarkets.com/.site/news/Stock%20News/663201/
this has pushed up the stock price as you have seen. With a float of about 450k and 219k short, the uncovered shorts have to cover their positions at what ever price is available. Basic supply and demand and scarcity theory are being played out before your eyes. This is how the stock can go up $15 in 2 days (66% today alone).
Some other documented cases of explosive stock moves:
- CHNR went from $12-$ 48 in 3 days. This was done on a larger float which is harder to do than EFUT. This is why the upside potential is so great. And CHNR only has $1.7 in cash.
-JRJC has gone from $15 to $45 in the past month! 300% again! This company has a bullish story and has also been lifted by the ADR craze lately. Here is an interesting posting on JRJC where the author outlines its prospects
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=25123&tid=4466&mid=4466&tof=13&frt=2
Look at what BIDU did. It went from $50 to $300 in 18 months. Hot Chinese stock with outrageous earnings and gross margins! BIDU didn’t just move because of its prospects but also because of investor’s appetite for foreign exposure, especially anything Chinese.
-In their latest quarterly report they project 59% revenue growth for FY2007. So they are not slowing down any time soon. They just announced a huge deal with the Beijing Tourism group and there is speculation that further announcements will be made. Seeing how the Olympics are around the corner as well as a big fair that takes place in Shanghai annually, more announcements stand to be made like today’s.
-Ohh, I forgot to mention that EFUT has $10 in cash, the highest of all the Chinese ones. That’s a pretty darn good cushion.
EFUT, is only up around 95% over the last few days and is Poised to Sky Rocket in the next few days for a few Key Reasons. All you longs…. Hold on Tight!
-On Oct 2nd there was a buy in alert on the stock of about 219K shares,
http://www.tradingmarkets.com/.site/news/Stock%20News/663201/
this has pushed up the stock price as you have seen. With a float of about 450k and 219k short, the uncovered shorts have to cover their positions at what ever price is available. Basic supply and demand and scarcity theory are being played out before your eyes. This is how the stock can go up $15 in 2 days (66% today alone).
Some other documented cases of explosive stock moves:
- CHNR went from $12-$ 48 in 3 days. This was done on a larger float which is harder to do than EFUT. This is why the upside potential is so great. And CHNR only has $1.7 in cash.
-JRJC has gone from $15 to $45 in the past month! 300% again! This company has a bullish story and has also been lifted by the ADR craze lately. Here is an interesting posting on JRJC where the author outlines its prospects
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=25123&tid=4466&mid=4466&tof=13&frt=2
Look at what BIDU did. It went from $50 to $300 in 18 months. Hot Chinese stock with outrageous earnings and gross margins! BIDU didn’t just move because of its prospects but also because of investor’s appetite for foreign exposure, especially anything Chinese.
-In their latest quarterly report they project 59% revenue growth for FY2007. So they are not slowing down any time soon. They just announced a huge deal with the Beijing Tourism group and there is speculation that further announcements will be made. Seeing how the Olympics are around the corner as well as a big fair that takes place in Shanghai annually, more announcements stand to be made like today’s.
-Ohh, I forgot to mention that EFUT has $10 in cash, the highest of all the Chinese ones. That’s a pretty darn good cushion.
Subscribe to:
Posts (Atom)