<<ASND buyout.
IMHO, we have dismissed the insider sale less than 2 weeks
ago of 28,000 shares at 23.75. I know there are many reasons why one might sell, incl. margin calls, home
buying, etc., but, for my money, such a huge insider sale at 23.75 is enough for me to sell ASND at a very
small gain. I know MU's Simplot sold a ton of shares at the low to cover a margin call but that tends to be
the exception rather than the rule. Do you really think the ASND insider had to come up with over
$600,000 to cover a margin call? I don't. IMHO, the amount of shares sold at 23.75 seems too high to give
credence to the reasons we sometimes conjure up for insider selling in order to ignore the obvious-- the guy
knows something negative that we don't. Of course, I understand not wanting to take a huge loss just
because 1 insider sold; I probably wouldn't either.
Despite the large blocks of buying, ASND seems to be having a lot of resistance breaking 25. Once ASND
breaks out to 30 or so with heavy volume, I may lose 5 points but I get more assurance of a confirmed
upward move rather than the current possibility of a dead cat bounce. Like Mr. Spock, I would also like to
see some insider buying. Gary, I think any insider purchase must be reported to the SEC-- not just insiders
who own 10% or more. Until ASND breaks 30 or we see insider buying, the insider sale of 28,000 shares
at 23.75 is just too compelling to ignore, especially when you can take a small gain. Has anyone tried to find
out more about the insider who sold?>>
ASND at the current valuation has great potential to get acquired.
Lets look at some facts:
1. mkt cap at only around 4x sales, typial high-tech acquistitions
were in the 7-10 times range.
2. large installed base and the product line is extremely attractive
for companies that want to get started very quickly in this
area which is growing and going to grow at 30-40%.
3. cascade and asnd combined for the price of one if one thinks
about a year ago pricing and in reality the fundamentals of
product technology for the company has not changed.
4. FR and ATM WAN equipment mkt for the next two yrs are 3B and 3.8B. The access concentrator mkt is also growing. Possible revenues for asnd asssuming 25% grwoth for concentrator and 30% share for WAN switches came out to 1.7B an 2B for the next two yrs.
Giving net of 15% the earnings will be 255m and 300m. Per share
comes out to around 1.4$ and 1.7$. Assuming conservative 25x will give 35$ and 42$ for the next two yrs; and 30% (more typical)
will give 42$ and 51$. Note that the numbers for mkt shares
are also conservative numbers.
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