We have more confidence now than we did a few years ago.
The old company, Stratex Networks (STXN), had most of its sales overseas while the Harris Microwave Division had most of its sales domestically. In fact, one factor that made their merger attractive was the fact that their sales regions were very complimentary with very little overlap. Thus, the old STXN would not have captured much business from either Verizon or AT&T but the new HSTX will.
Its certain that HSTX won't capture but a fraction of this business. However, unlike nearly all of its competitors, HSTX is a "pure play". For example, if the Harris Microwave Division got a bunch of contracts and doubled its revenue, this would only have been a small percentage increase in revenue for the overall Harris Corp and the stock price would only have been nudged up, accordingly. That's because Harris is involved in many different businesses/markets. But HSTX is a "pure play" and a bunch of contracts in the backhaul market can cause a big increase in its revenue and profits... thereby leading to a big increase in share price.
In effect, as a "pure play", our share price will see greater volatility along with greater peaks (and valleys) than its larger competitors. That provides investors with greater opportunity for profits (and losses).
Hope that helps, Rob |
