ANDW. Here's the latest play from Briefing.com Remember, they picked IFCI. Do the words, WIRELESS, BROADBAND AND INFRASTRUCTURE ring the bell? These guys seem to be where it's at. Russ
Trader's Edge - Andrew Corp (ANDW)
01-Mar-00 08:28 ET
[BRIEFING.COM - Damon Southward] Orland Park, IL-based Andrew Corp (ANDW 24 3/4) is a designer of global communications systems equipment. Products include coaxial cables, microwave antennas for point-to-point communication systems, earth stations for satellite communication systems,
cellular antenna products and electronic radar systems. Over the past three months, the issue has rallied more than 70% from the $14.50 level, benefitting from a return of capital to stocks that have been distressed over the past 18-24 months; in particular, mid-cap names with a history of turning a profit..
While company's expected year/year EPS growth of 12% this year and 24% for 2001 fall shy of the triple-digit rates of expansion desired by many growth investors, we believe the issue could find a following among value investors who want to participate in tech, but are unwilling to pay the triple-digit P/E ratios that most of the top names are going for.
Trading Points
One of the major themes of the first two months of 2000 has been The Turnaround. Former highfliers turned bottom dwellers --such as Geoworks (GWRX), MRV Communications (MRVC) and PMC-Sierra (PMCS)-- have again found their wings. A year ago, each of these names traded for less than 1/10th their current share price. Propelling these issues has been a furor for theme stocks; e.g. B2B, Genomics, Linux, CRM.
The theme behind ANDW's ascent has been "Wireless Infrastructure." In January, Andrew was awarded a $6 million contract to provide Newbridge Networks Corporation (NN) with broadband wireless hub antennas. The Andrew hubs will be integrated in Newbridge's LMDS broadband wireless system... The company recently announced the acquisition of Conifer Corp, a manufacturer of MMDS (Multichannel Multipoint Distribution Service) subscriber equipment products...
There has also been a buzz among analysts over the last several weeks regarding the introduction of new wireless products. Anticipation of the unveiling and reassurance from management that January and February have been tracking well, prompted SG Cowen to issue a bullish note on the stock last week.... In late January, PaineWebber upgraded ANDW from "neutral" to "buy," based on an improved outlook on the company's ability to execute on wireless growth opportunities as well as the improving conditions in Asia. The firm raised its price target from $13 to $36.
Fundamentals
Andrew recently initiated a plan to restructure its manufacturing operations of its towers and wireless
accessories businesses, phase out of its AVS small aperture earth station product line and divest itself of its SciComm government electronics business. In connection with the restructuring, approximately 600 employees and 280 temporary/contract workers will be terminated.
For the quarter ended Dec. 31, Andrew posted earnings of $0.21 a share, a decline of 25% from the year-ago period, but three cents above the Zacks mean estimate. Sales edged up 7% to $233.6 mln and bookings rose 32% to $253.2 mln.
A First Call survey of seven analysts yields a fiscal 2000 earnings estimate of $0.81 (P/E 30.5). Earnings for 2001 are projected to expand 26% to $1.02 (P/E 24). Company due to report Q2 results in mid-April.
The company completed three acquisitions in 1999: a distributor of commercial products; a supplier of RF products to the broadcast market; and a designer of RF and microwave amplifiers and assemblies.
The company is a member of the S&P 500 Index. Andrew was recently removed from the Nasdaq-100.
Fidelity is the company's top institutional holder with a stake of approx. 5.5 million shares.
Key Stats
Price/Sales Ratio: 2.4
PEG Ratio: 1.41
Market-Cap: $2 billion
Shares Outstanding: 80.5 million
Float: 79 million
52-Week Range: $11.00 to $25.50
Average Daily Volume: 1.1 million |
