You're correct, TLAB and CCSC are competitors. CCSC doesn't supply equipment to TLAB. I've read a lot about the echo cancellation market recently, and it seems that each company has about 40% of the global market for echo cancellers. Actually, TLAB probably has a slight edge over CCSC. Domestically, TLAB is the dominant supplier, while CCSC commands the lead outside the U.S. The reason that TLAB makes much more money from their products is that their sales model is primarily a direct sales approach. CCSC sells most of its products through OEM agreements, and as a result, doesn't charge as much.
The stock is currently in a short-term uptrend, and is about to hit the 200 day MA (from underneath). If CCSC can penetrate this level and slowly continue to climb, I think we might be able to hold the price. The problem in the past is that CCSC reached the moving average and then blasted up into the mid 20s, only to come sliding down when someone sold a lot. I see strong resistance around $24 and again at $28.
1997 should be a good year for CCSC. However, unless the market begins to respect small caps, I don't expect to see a stellar performance from the stock.
I have a price target of $25 by the end of 1997.
Longer term, I have a 5-year price target of $70.
TDW |
