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Redback is our favorite stock at TechStockInvestor.com:
We received an e-mail asking us what our current favorite stock is, and we would like to post our answer here:
Although we prefer a "basket of stocks" approach to investing in the highly volatile area of tech stocks, our current favorite stock is Redback Networks(RBAK).
As a matter of disclosure, we own Redback, and recently added to our position. We would like to hold this stock long term, and this is not intended to be a "pump and dump" recommendation.
We believe that lack of broadband access is the main problem with the internet. If you ask people if they would rather have a more powerful computer, or high speed access, most would choose high speed access.
Redback provides networking systems that manage high speed access to the internet by cable, DSL, or wireless. They also acquired Siara and are developing products to manage fiber optics.
A lot of smart people are backing this stock:
Steve Harmon of e-harmon.com calls Redback "a must own in my opinion" and made it one of his top 10 stock picks for 2000.
Jono Steinberg of Individual Investor calls Redback "my top broadband pick." See article at: individualinvestor.com
Paul Johnson of Robertson Stevens says Redback "has already cornered the lion's share of the subscriber servicing market."
Mark Edelen of Thomas Weisel Partners picks Redback as "one of the network winners."
Redback CEO Dennis Barsema, when asked what he thought of the stock price of Redback, replied: "We think it is undervalued."
Revenue for the latest quarter increased to $26.1 million from $4.5 million a year ago, an increase of 480%.
The stock has made an incredible run already, and could be vulnerable to some profit taking, but long term it could do quite well.
There is risk involved when you have competitors like Cisco, Nortel, and Lucent, but if you can stand the risk and volatility, Redback is worth a look.
If you're looking to plant a seed and hope it grows into a giant tree, Redback is an excellent choice.
Richard Steinman
TechStockInvestor.com
Website: techstockinvestor.com |
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