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Technology Stocks : Spectrian Co. (SPCT)
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To: Leo Francis who wrote (90)7/10/1997 2:08:00 PM
From: Thomas C. White   of 738
 
I'm curious as to why Powerwave (PWAV), a major competitor to SPCT, has such a larger market cap than SPCT. Right now SPCT market cap is about $335 mil, while PWAV is about $555 mil. I am surprised, since PWAV has such a huge concentration in sales to Korea, mostly going into buildouts whose completion can be quantified, while SPCT seems to be developing larger customer base (Qualcomm, NT, as well as direct sales to customers such as Omnipoint etc.).

Admittedly at sales levels of recent Q's, PWAV seems to have somewhat better margins than SPCT (I'm assuming PWAV "buys out" many components while SPCT seems to manufacture a lot of their own semis etc.), but due to SPCT manufacturing leverage my suspicion is that margins will converge as both companies get into higher sales levels. SPCT also seems to have larger market share than PWAV (I'm figuring SPCT sales for this Q above $35 mil, while PWAV's recently report sales in high $20 mil level).

Any thread comments would be appreciated.
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