Repeater Technologies (NASDAQ: RPTR)
Cell phone users have come to understand the big problem with digital wireless technology: Once you leave a city, your signal fades as you go farther away from base stations. Carriers can add more stations, but that can be expensive and time consuming.
Repeater Technologies has come up with a novel solution for the problem. Its equipment takes a fading signal and 'repeats it,' allowing to extend further away from the base station.
Phone companies have to love the economics of the equipment: A new base station costs roughly $100,000, but a repeater is just $15,000.
Early next year, Repeater will also launch a line of products that help cell phones work better within office buildings. According to Philips Publishing, the market for indoor coverage will be in excess of $800 million by 2003.
For now, Repeater sells equipment into the traditional CDMA market. Companies such as Sprint PCS (NYSE: PCS) use CDMA across the country. But new flavors of CDMA, that promise higher data transmission speeds known as 3-G, are in the offing.
Repeater is already working with carriers to develop 3-G repeater technology. Bank of America's Mark McKechnie thinks "This market opportunity could ultimately dwarf the current CDMA business."
Repeater had sales of $17 million in for its March 2000 fiscal year, and it is on track to double them in the current fiscal year. The company is expected to become profitable by next summer, so its recently fattened balance sheet should prove quite sufficient.
Shares of Repeater Technologies held up well in recent weeks, thanks from positive analyst coverage. After being priced at $9 on August 8, the share traded in the mid-teens until mid-September.
But the weakness that has dominated the Nasdaq recently has been especially unkind, sending the stock down to a recent $9.44. That leaves the stock at a steep discount to publicly traded competitors such as BreezeCom (BRZE) and AirNet Communications (ANCC).
Over time, that gap should narrow, allowing Repeater to rally back into the teens.
individualinvestor.com
Jim |
