OT- try KRUZ and ACRI - 2002 is their year
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License to ring 2002-01-03
Licensing DSL technology could help position Aware (AWRE) for the future.
by Shannon Swingle, contributing editor
An uncertain economic environment and a semiconductor market at trough revenue levels means that this may be a good time for investors to look into the semiconductor intellectual property (SIP) sector.
In the broadband communications field, Aware (AWRE) develops and licenses DSL technology to semiconductor and equipment companies for use in conjunction with existing copper telephone networks. The company also makes software for IP products for voice- and video-enabled applications and video games.
Aware mainly competes with other companies’ in-house development and design teams, and with many corporations looking for cost-cutting options, Aware is in a strong position to cash in.
Friedman Billings Ramsey’s Alvin Kressler believes the time for investment in SIP companies is now, especially those focused on communications. Because of the telecom industry overbuild and the lack of available capital, coupled with a macro-economic slowdown, many communications chip vendors have started to show losses. These conditions, argues the analyst, have set the stage for companies to look outside for design and development expertise as a means of cutting costs.
And that’s where Aware can step in. Kressler initiated coverage of the company on Dec. 21 with a "buy" rating. Aware, says the analyst, is in a position of strength, with $58 million in cash and very low operating expenses, allowing it to acquire a technology or company or expand its product portfolio. Kressler also says the company gets "software-like margins that can provide dramatic ramps in profitability."
Robert W. Baird’s Theodore Moreau also favors Aware with a "strong buy" rating in his Nov. 1 report. Looking beyond the economic slowdown, the firm believes Aware’s intellectual property business model has proven to be highly profitable in a normal business environment. The analyst expects greater visibility into the company’s market strategy in 2002.
It’s important to note that shares of Aware rose dramatically during the month of December on rumors that Intel would introduce a modem based on Aware’s software. Because this has not been confirmed, Stephens’ Charles Pluckhahn gives the shares a "neutral" rating in his Dec. 13 report. |
