I'm glad to see Chuck Kissner back in the CEO saddle leading AVNW.
I've been long since the 1990's when, as DMIC and under Kissner's
leadership, I tripled my investment and bought my mother a house.
Braun seemed to be an honest guy that did a lot to help put the AVNW
house back in order, but we have not done particularly well at exploiting
the huge growth potential that faces us in the wireless backhaul market.
Hopefully Kissner can help AVNW better capture that growth potential.
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23 June 2010
The global wireless and mobile backhaul equipment market is expected
to be worth US$38.0 billion by 2014, growing at an estimated CAGR of
18.7% from 2009 to 2014. Microwave forms the largest market segment
and is expected to reach a size of US$16.5 billion by 2014. Asia is the
largest wireless backhaul market; and is expected to be worth US$12.2
billion by 2014, accounting for nearly 32% of the total revenues. The
Asian wireless backhaul market also has the highest CAGR of 21.8%.
mynewsdesk.com
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Its not a stretch to think AVNW growth can match those CAGR figures.
In fact, that's the minimum that I expect. Further, that kind of growth
will easily justify a PE of 20. Now its been awhile since AVNW has shown
any earnings, but we have a strong balance sheet and I think we should
see quarterly EPS of $0.50 once we capture our fair share of the market.
That's an annual EPS of $2.00 and, at a PE of 20, a price of $40/share!!!
With the current price well below $4/share, that means our AVNW has
the potential to be a 10-bagger. I don't think this is far-fetched.
That doesn't mean getting there will be either swift or easy. One big
problem we've faced has been the terrible state of credit markets.
Customers who may prefer to buy AVNW products often are unable
to obtain credit from traditional sources. In order to sell their products,
some of our competitors (particularly our Chinese competitors) are
willing to provide the financing those customers need. Such vendor-
financing deals can be highly risky and AVNW should not consider
following this approach. However, traditional credit markets are
slowly on the mend and AVNW can aggressively help customers
access this credit so customers can purchase our products. At the
same time, AVNW must continually innovate so that our products
continue to offer a superior value proposition; that is, we have to
offer products that help our customers build profitable networks. |
