Sorry, when I posted this...I was out of time. Most of these issues were brought up by briefing.com, but its a paysite, so you wouldn't be able to access it. But let me elaborate on them.
1) In Artesyn Technologies warning they lowered expectations for Q4, and cautioned of problems ahead for the first half of next year. The shortfall was blamed on undelivered critical components and product shipments delayed by customers. It is plausible that PWER could be taking some market share away...but it seems more an issue of lowered overall demand, which would coincide with the lower capex spending from carriers currently effecting the Telco equipment makers.
2) The Insider selling has been SIGNIFICANT (sorry for the typo). Stephens Group (who helped take the company public in 1997) has lowered their stake from 23.4% in late march, to now around 9%. That's some serious selling for one of the main founding investors. Also, execs have been selling like crazy, even with some large several hundred thousand share blocks pretty recently...check Yahoo! Finance if you don't believe me :).
biz.yahoo.com
3) Power-One is showing symptoms similar to ATSN as inventories are growing considerably faster than sales. As of Sep 30, inventories for PWER were $153.2 million, up a staggering 216% yoy while sales grew 107%. For ATSN, inventories grew 48% as sales grew only 19%. Check out their filings...
4) When A/R increases that fast...it usually means trouble as they aren't collecting payments from customers. As such, DSO's grew to 68.9 up from 58.1 the previous year.
5) Finally, Cisco is a major customer for both Artesyn and PWER. And Artesyn cited a slowdown for orders from Cisco as one of the major reasons for their shortfall and cautiousness going forward.
Don't mean to be so negative...but just thought Id bring these issues up. For disclosure...I sold my remaining stake in PWER, and have started a short position. |
