thetelecommanalyst.com
10. Analyst Spotlight Issue #17
Signal Technology
James McIlree, Senior Analyst, Tucker Anthony
Interviewed by Deborah Satter
The Telecomm Analystsm recently spoke with James McIlree, telecommunications analyst for Tucker Anthony. Mr. McIlree rates SIGNAL TECHNOLOGY (STCO) a STRONG BUY, citing its emerging, commercial wireless market, great management team and compelling valuations. (Mr. McIlree is not a SIGNAL TECHNOLOGY shareholder and his firm has not done any investment banking work for the company in the past three years.)
[THE TELECOMM ANALYST — DEBORAH SATTER] What does SIGNAL TECHNOLOGY do?
[JAMES MCILREE] SIGNAL TECHNOLOGY makes defense technology and is commercializing it for the wireless industry.
[DS] What other avenues is SIGNAL pursuing?
[JM] SIGNAL is acquiring businesses and product lines, while also heavily marketing growth areas in space, communication and defense.
[DS] What is your rating on this stock?
[JM] I have a STRONG BUY rating with a six-month price target of $38. [SIGNAL TECHNOLOGY closed at $18.25 on July 21.] I expect revenue of $94 million for 2000, with EPS of $0.29. My revenue estimate for fiscal 2001 is $114 million, and I anticipate EPS of $0.56.
[DS] Who are some of SIGNAL TECHNOLOGY's competitors?
[JM] Competitors include REMEC (REMC), CELERITEK (CITK) and MTI (MTIC).
[DS] Why is this company your favorite pick?
[JM] SIGNAL is my favorite pick because of its very strong management team, a fast-growing client base and, on the valuation side, the stock is trading at a significant discount to its competitors.
[DS] What can we expect from SIGNAL TECHNOLOGY in the future?
[JM] I expect SIGNAL's commercial wireless business will exceed its defense spending in four to five years.
James McIlree
Senior Analyst, Tucker Anthony Cleary Gull |
