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Technology Stocks : Aviat Networks
AVNW 22.85-1.9%Nov 7 3:59 PM EST
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To: The Ox who wrote (51)6/14/2007 11:30:27 AM
From: Rob Preuss  Read Replies (1) of 312
 
(The stock has rebounded nicely since the hard sell off in early May. Let's hope the next report will improve the street's outlook for HSTX.)

Rebounded nicely: yes, so far.

Recovered: not yet.

I think the street will be looking to whether or not HSTX is executing well on its plan for merging the operations of STXN with HRS Microwave Communications Division. The last report seemed to indicate that HSTX had already stumbled, despite many months of pre-merger planning... the excuses management offered seemed weak and that engendered the hard sell-off. Obviously, this was a signal that the street lacked confidence: the street expected management to tell them that everything was on-track according to plan, but that just wasn't the case.

1) If HSTX appears to continue to be stumbling... If HSTX continues to be behind schedule... then I think we can expect another hard sell-off.

2) If HSTX has caught up to its original plans... but doesn't have any upside news to report (orders/revenue/earnings, etc)... then I think the share price might start creeping back to where it was before the sell-off. [However, this assumes that the overall market continues to be buoyant - as it has been recently.]

3) If HSTX has caught up to, or surpassed, its original plans and has a few cheery news items to report as well... then HSTX may get a quick recovery to where it was before the sell-off, together with an upward bias in the months beyond.

I think Scenario 3 is unlikely but Scenario 2 is something we can reasonably hope for. Recent upward share price movement for HSTX seems to be on low trading volume, so I won't be surprised if we see a reversal. I'd feel better if the trading volume was higher.

Rob
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