QUAL, which is one of the companies which cut into
MLIN's fast Ethernet business, reported its results
yesterday. Its revenue growth was good ($20M instead
of $16M the previous quarter), but its margins were very
poor (profits before writeoff = 0.06$/sh). As a consequence,
it is getting massacred today. Interestingly, it was just
downgraded by Needham and Volpe Brown. QUAL cited intense
price competition in the networking chips market.
Why would Needham reiterate a buy for MLIN on Monday,
and downgrade QUAL , whose results were a little bit better
(but not very good)? The Needham analyst must see something
that others have not picked up yet. For those on this
thread who are still long MLIN, it would really be
worthwile to do whatever it takes to get a copy of
the Needham analyst's repport.
On the other hand, LEVL reported its results on Tuesday,
which were great as expected. Elias Moosa, the Robertson
Stephens analyst, upgraded it. Clearly Mr. Moosa loves
LEVL and hates MLIN (and MLIN's management has obviously
little affection for him). But LEVL has a P/E > 40, so
that all the good news are already fully priced in the
stock. |
