Bill,
I think we agree on a lot of things.
As for WSTL ADSL versus EFNT entire product line of CPE, well Im nto smart enough to know every technical product. I think I know more about WSTL than probably 98% of WSTL longs..and I dont own the stock. The other 2% are either ex workers, people who work in the DSL field (I do not), or have strong contacts that I do not.
All I can say is I look at numbers and analyze, i do the general "macro" DD on a sector and analyze. Whatever shortcomings one company has over the other or whatever modems they sell vis a vie each other, one has a far superior gross margin in "whatever" they sell in the CPE side. I do know enough about Westell to know TAP is not CPE. For the rest, i would advise Westell to move up the "CPE foodchain" if they are having such a hard time with their product.
Other than that, I will leave the discussion there... I am not technically proficient in the modem classes and things like that, i fully admit that. But I can see problems from a long distance, and in this case a blind squirrel can see them.
All Im saying is by the time Westell even gets back to where it was 3 months ago, its going to be March 2001, and at that point we are already onto the next phase, VoDSL. yes ADSL will be there, but I dont want a pure commodity ADSL investment.. its selling for sub $175 now in volume, the time to strike is now when the coal is hot. squeeze the healthy profits now while you can, and then when the next level starts, VPNs, VoDSL you can relegate ADSL to what it will be at that point.. huge volume, tiny margin ... yes there will be EVEN greater volume in the next 2-3 years but man are ASP's going to fall and if you think margin pressure is bad now, wait in 9-12 months. But unfortunately it sounds like that is MZ's turnaround time to get back, simply to the place they were a quarter ago.
.. its like they are trout.. swimming upstream. Yes they will eventually get there, but why bother unless your a deep discount value investor. 3 steps back, 1 step forward.. its a long road for a WSTL investor. I "thought" (and Im an EFNT long) that by what i read on this board, and the smarter people on WSTL Yahoo board that WSTL had closed the gap to maybe 1-1.5 quarters behind EFNT/ALA in "comparable" areas.. I "think" that gap has just been expanded back to 3 quarters and could be worse. As you know, you sound very intelligent, 9 or 12 months lead time in technology is an eternity...(and Im not saying WSTL technology is behind ALA or EFNT, simply the BIG picture, sales/marketing,r/d,management, simply put: the company as a DSL entity)
On top of that "assertion" by a non technical guy like me, there are so many other "weights" around the ankle of this company, namely cash and namely management. Those are my opinions, anyone can feel free to disagree. Im not looking for the General Motors of DSL... the unwieldy many divisions, no direction, high volume, low profit margin player. I want the concentrated, forceful companies that I feel can really lead the sector. Hence I would never invest in WSTL. As George Bush likes to say in debates "This is simply a difference in philosophy"
At this point for all I know WSTL gets to $12 before EFNT gets to $70... it is quite likely in fact. I just have no idea of the direction of WSTL long term, I have no idea of the direction short term. It could be a great trade... but I want to know my company. I could never know WSTL with what is shared with the public. They are run like a private business, not public. Hence, they will be treated like one by the investing community.
Good luck with your investment,
Mark |
