x, There is of course a chance that IDTC will go visit the low teens again. But frankly, I do not think it is a good short at all (as a matter of fact I am long). IDTC, is not even priced as a normal long distance telecom. company, there is nothing in its price for either the phone card or internet telephony to be "deflated out". It is priced at less than .7 PSR on this period of 12 months (last quarter sales were already close to $200 MM and almost twice the corresponding quarter last year), relative to AT&T's PSR of 3, but good old T surely cannot grow at even 50%/year, which IDTC has done for some time. IDTC is priced at twice book, while T is priced at 3 times book. Despite the relative youth of IDTC, their LT debt to equity ratio is a respectable .48, while T is only marginally better at .32. But IDTC is growing in leaps and bound, while T is slumbering to find new markets in which to grow.
I think that IDTC is priced quite fairly in the $18 to $25 range, it will be a bargain at $10 (I bought there few months back before the big run to the high 20'), and could develop some very nifty premiums if the I-net mania resumes. Personally, I do not think the I-net mania will resume soon, but I am willing to pay a fair price for a company that has first grade service (I have been their customer for more than 3 years now), rapidly growing top line, and yes, despite growth pains that show in some irregular earnings stream.
Zeev |
