10% growth quarter over quarter is "nothing" in this market for any company of small revenue revenue base... you dare compare WSTL's revenue stream to Cisco or Dell, you have me laughing on the floor. Ever hear the law of large numbers? If you are a $24M business (TAP Teltrend) you should be growing at some high rate... if you're a billion in revenue your not going to be able to grow as fast... sheesh I think you know these facts, you just enjoy being difficult. For its small size, its a slow growing business, very very very slow. CPI is slow.. ver very very slow.. 40% a year growth. For such a tiny company in this market that is terrible.. there are MANY companies the size of TAP and CPI in this market doubling every quarter (i.e. EFNT 3 quarters ago) Almost any New Economy company of "that size" has been growing 40+% sequentially, take a look at eCRM companies when they were tiny, Broadvision, Vignette, take a look at SAN companies, Brocade, take a look at B2B at that size, ARBA, CMRC, even DSL companies like Globespan, Efficient, even larger companies like PMC Sierra and Applied Micro can pull off 30% sequential at their sizes... im laughing though.. i truly am. TAP is now akin to Cisco -- next I will hear CPI has more customers than Cisco so should be worth more too! Please get a reality check on your "metrics".
But its not considered slow because your comparing TAP to "Cisco" lol.
And I dont care what the gross margin is, the fact is it has NEVER BEEN PROFITABLE within the Westell business through organic growth. So in your analysis the only way Westell became profitable is it BOUGHT a profitable company ... ok, way to go Westell. Rock on...
And I dont care what analysts say it will grow... I saw the numbers of Teltrend, and it was NEGATIVE growth... my analysts say Efficient will grow 500% next quarter, my analysts say it will grow 1% next quarter... big deal. You sound smart enough not to be basing your analysis on "analysts" probably the worst most useless group of people in the investment community.
Please simply refute this: In the last quarter as a public company, Teltrend sequentially SHRANK in revenue. (but of course in the future this will reverse, as they bring on G.HSDSL technology that will change everything so who cares about revenue !) Good, you have a very low revenue base combined for TAP (what? $35 million) that is growing 40% a year, 30%? well whatever the analysts tell you... combined with CPI... 40% a year, off a measly $10M base (but oh my they are going into ASP... p.s. Piper Jaffrey estimates there are 30 new companies a WEEK not a typo going into ASP).... and both those companies are worth over the past 3 years..umm... $4-$8. They are gems that no one understands but MZ and you... SDSL is out the door here within months..if not weeks, and Mark Floyd and the engineering staff at Efficient know absolutely nothing about the changing face of DSL..they only focus on the next 2 weeks ... somehow they were the first to get self install modems out the door en masse, somehow they were actually making inroads at the 2 biggest US deployers (SBC and COVD), somehow they got very lucky that those 2 became their top 2 customers... and they had no vision to know to go to Asia while the RBOCs sat on their ass for 9-12 months with their notoriously "efficient" "customer service" hierarchies... but everything else in the market will surely take them by surprise. They have little if any vision and just enjoy spending their war chest....
And finally, Alcatel is probably mulling a buyout of Westell to get to the TAP business. Ok i see it now....
I see the strategy now... if you have failed becoming protifable on your own, and your running low on cash... buy a low growth profitable company (wait low growth is being generous, I mean negative growth sequentially) with a much better cost structure and raid its cash hoard in the process ($29 million)
You're right, this is a great management team... thats a coup. Plus you get thrown in as a bonus technology apparently you could not develop in house with your R&D dollars ($6.9 million that you had to "ask" your own customers for-yes SEC documents are great)
This is genius. And the market has rewarded Westell handsomely for this. Only the few last ignorant holdouts cannot see this.... truly a Cisco in the making.. (well at least growing faster than Cisco) |
