Shoes,
My pick for this year is TKLC. Tekelec makes the "Eagle STP" (Signal Transfer Point) SS7 Network Switching solution. Tekelec also makes advanced network diagnostic systems. The Eagle STP allows wire line and wireless networks to provide intelligent network services like 800 number database support along with Local Number Portability (LNP). LNP is newly mandated by the FCC and all of the Regional Bell Operating Companies (RBOC) and Competitive Local Exchange Carriers (CLEC) along with the wireless Personal Communications Services (PCS) Companies are scrambling to put LNP support into their networks.
This is a market that shows no sign of declining and the equipment is high margin and high end with no chance of becoming comoditized like widget maker's products. The Eagle is in the 1-3 million-dollar range per unit and is currently out front in technology. The big boys like Nortel, Seimens, DSC are just too slow to provide new features and new platforms. Nortel has a employment recruiting sign in their lobby Searching for "Eagle" busters! You can't bust what you can't reach.
Tekelec has become profitable in the last few quarters showing third quarter revenue growth of 81% over second quarter earnings.
Market Cap 751M
25.8M Outstanding Shares W/4.4M Float
Price To Sales 7.52
36.3 12month Trailing P/E
Revenues for the nine months ending September 97 grew 70% to $81,766,000 from $48,120,000 reported in the same period last year. Net income for the nine months, was $11,099,000, or $0.39 per share, compared to a net loss of $5,105,000, or $0.22 per share, for the same period last year.
Second quarter the company had an approximate 30 million-dollar backlog increasing to an approximate 60 million-dollar backlog at the end of Q3.
Tekelec has substantial sales to Bell Atlantic and has recently announced that GTE Intelligent Network Services has chosen the EAGLE STP platform to deploy Local Number Portability (LNP) in their nationwide network. Tekelec also announced on Thursday that Telkom South Africa Ltd. has chosen Tekelec's EAGLE STP for it's network. Initial shipment for Telkom South Africa will begin in 1Q98.
The company has warned that the Q4 earnings may not show the same quarter over quarter growth that they have in the past quarters. 1998 is shaping up to be a great year. This should have been one of the stocks included for 1997. 52 week low of 7 and a 52 week high of 49 a nice little 7 bagger ! Current price has been as low as 25 in the last week and currently 33+ on nothing but good news. The asian flu is providing some great buy-in opportunities. I am very long on this stock.
Glad I found this thread, thanks for taking such an active role in it.
Regards,
Milkman |
