DE,
Regarding the latest growth numbers and drop caused by power filter legacy sales. This was the case last quarter where the new stuff grew 30% sequentially. However, AVNX is almost 100% selling the new stuff now and their recent earnings warning involves only the new stuff. The sales there are decreasing as well.
I've written quite a bit about AVNX over the past few weeks. Am very optimistic about its future. Fundamentally, however, given the near and possibly mid-temr potential, I'm not touching it above $6.50 or so. I think 5x sales is maybe the most expensive that I would touch it for and the relevant figure at this time, assuming it doesn't fall further, is $72 million or a $360 million mkt cap.
On the other hand, for those who are not so impatient, and just want to buy and put away, and recognize it as a speculative but very well thought out risk/reward investment, then who cares. My article this week on Fred Hager covers chromatic dispersion. Resolving the chromatic dispersion issue is one of the key problems that must be resolved or we don't get to 10 gig systems, much less 40 gig and OC-768. From my analysis AVNX and Lasercomm are the two leading players in resolving this billion + a year market, a market that must take off if the network is ever to take off again.
So, for once I think I can say everyone is right. Things look crappy. I'm not buying it based on fundamental valuation at these levels with the long-term crunch in this industry. However, just the same, I am very excited about AVNX from these valuations for its long-term promise. We are talking 3-5 year minimum time frame and if all goes well holding throughout the decade for amazing returns.
But as stated above keep all this in mind. Buying AVNX is what I would term "informed long-term speculation." Treat it as such until the situation becomes clearer over the next year or two.
Tinker |
