As I mentioned, the selling pattern did not precede any bad news nor was it followed by any. It also was not during the highest spike for the 3rd/4th Q. I've seen Formosa Ltd selling before but never 6-7 registrations in 30 days for that kind of volume. The two selling periods were followed by a sharp decline in price followed by equal or greater upturns.
The steep ups and downs (+/- 30% or more) are approximately once every 45 days and often take only a week or two to occur. As I said, real opportunity for $ making trading.
While the average volume for CMVT is about 300M shs, typical seems to be 50-100M shs peaking on the spikes.
On what I call the spy side (Audiodisk) of their business, there isn't too much competition, mostly Melpar (E-Systems Inc), Loral, Applied Signal Tech, GTE & Harris Corp. However, some of those names are far better known than CMVT which probably makes it somewhat difficult. On the other hand, the strong Israeli connections of this company is probably a boon in dealing with that country (which doesn't have to observe the niceties of US law when eavesdropping on terrorists etc.) and that relationship probably also enhances CMVT's reputation with governments/police that would like to emulate Israel's "success."
The domestic side of their business (Trilogue) certainly has far, far more competitors and with the breakup of AT&T, it will probably become even more competitive. Much of their technology (virtual telephone, fax, voice messaging) in this area is just starting to get tapped by emerging market countries as well as by cellular companies all of which bodes well for CMVT.
I think your sense of this company's prospects are correct. Quarterly sales/income/backlog have continued to increase since I started following them in `93. I presume that a good deal of the "lack of notice" (trading volume) CMVT has had, has to do with their low cap and therefore ineligibility for many funds and institutional investors. As far as I know, there is only one fund that is active in this stock and it is a relatively new one that concentrates on Israeli related stocks. Additionally the liability to equity ratio is extremely low and current assets (of which cash/cash equivalents are 60-70%) nearly equal the total equity (perhaps not leveraged enough ). The point is, the market cap is only 3 times net worth, most of which is cash.
To me, this stock is an ideal candidate to actively trade, and if ever caught, be comfortable with as a longer term investment.
Al |
