ALVR broke through 3-year high($15.09) with an all time high volume of 6M shares on Wednesday 3/3/2004, and never looked back, closed at $16.73 on Friday.
More big institutions are realizing ALVR's potential and bought in recently. This trend will likely to continue based on the strong volume breakout, momentum is definitely in the stock. Tobin Smith at ChangeWave.com recommended ALVR to its newsletter subscribers Wednesday, look like he has got strong following.
It is no longer a undervalued stock, price is probably ahead of its fundamentals. But my reason for continuing to hold (actually bought more at $11.80 about a month ago, on the first 20% correction) is the significant similarity between ALVR now and SINA in July 2003 in terms of market potential, sector leadership, entry barrier, Broke to 3-year high price on all time high trading volume, accelerating institutional ownership and not yet a popular street name.
I bought ALVR based on Ben Graham's value investing principle - it was trading at $1.86 in Feb 2003 with $3.3 cash per share and zero debt, cash burn rate 10 cents/quarter with improving trend. I bought other below-cash telecom and biotech stocks too, but I like ALVR the most because of the huge potential of its broadband wireless equipment and dominant market leadership - so I accumulated ALVR around $2 and it became my largest holding in Feb 2003. I had more shares than the 5th largest institution owner (according to yahoo finance), not that I had a lot of shares, it was because of the extremely low institution ownership after the crash from $55 to under $2. Initially I had a double in mind as price target, but soon the business improvements (new orders) made me revised target upward, and new institution buyers such as Merrill Lynch, Citigroup and some hedge funds around $6-7 (SEC filings) made me to hold. My instinct told me that those big name firms don't just buy 50,000 shares and stop, that was just the tip of an iceberg after their research work and decided to buy. I am holding most of the shares now at $16.73. The holding of ALVR above $6 is a true departure from Ben Graham's style and purely based on my tech industry insight and gut feeling experience after holding through PHTN from 3 to 65, and SINA from $1.5 to $35. After you hold through two 20 baggers you know what I mean. I label myself as a Graham style buyer and a big-trend rider(holder) when the business continue to improve and price pattern gathering momentum until the story is discovered by the broadest public (such as I sold PHTN when its CEO was interviewed on CNBC). ALVR has many characters of a SINA, PHTN, QCOM and even CSCO, it will very likely become a "next big thing" stock touted by major medias in a year or two.
I will continue to monitor institutional ownership and price trading pattern, as well as media coverage and fundamental development of the company (new orders). ALVR may run to $22 within two months, my one year target is $32, I would not be surprised if it reaches $45 in two years, plus there is a big chance ALVR will be acquired by CSCO or another large player.
I published various messages on Internet when ALVR became my largest holding at $1.86 in Feb 2003, and reasons to continue holding when it went through $5, 8, 10, now 16. If you are interested in exchanging investment strategies/ideas and seeing those published messages, please send me an email at hu668 (at) yahoo (dot) com. Thanks, |
