Peter, in the PCB industry, there're 3 classes of manufacturers: (1) the ocean fish which does >$1 B in sales, (2) the river fish ($10 - $100 million) and (3) the pond fish (<$10 million). In terms of growth, industry statistics indicate the river fish grows the fastest. The ones that cross $100 million are usually bought out by the big fish at a premium.
It's not a trivial matter to move from pond to river, many have tried but fallen back, including MWAV in the past.
MWAV has learned from past experience and this time I think they're well positioned to grow strongly yet with stability. It's still small enough to give customers the extra attention and care but big enough to provide flexible scalability, quickly adjusting to new product requirements, and timely delivery.
The company is investing in new equipment to increase productivity and cut cost. Their QC and QA departments are surely impressive. Every circuit board must go through stringent final examination before being shipped to the customers. As a result, MWAV exceeds industry standards in terms of yields and delivery.
It's no coincidence that their business with Lucent is expected to more than triple this year to about $15 million. It takes time and a proven track record to get there. They have done it and now enjoys an excellent working relationship with LU. I expect the relationship continues to benefit the company in the years ahead. Likewise, their track record and relationship with Motorola will bear significant fruits in the days to come. There're several household name customers (current customers) that may be placing more orders with MWAV including Boeing, HP, PowerWave etc. Don't be surprised to hear of new customers with names like Nokia and Ericsson.
MWAV was a $20 stock many years ago. Today they're a much better company. With all the ingredients and a well thought out recipe in place, management is determined to take the company over the $100 million mark in a few years. If they maintain the 100-150% growth rate projected for FY 2000, we'll be there in less than 3 years.
On top of that, management is working with a PR firm they just hired to get the story out to WS. I like their proactive style.
Regards,
Tom |
