Dan that was a great question...... What are some of the things wrong with MRV?
Lets go through some questions, and perhaps we can add a few in to the mix to be answered.
1.How is management? Noam Lotan etal. have had a precise plan in the works for years. The management of this company has been dedicated to a specific field and have given their all to one area. When management gives a date to release product or information they stick to it(how many companies can claim this).
2.Are they leading or trailing in their field? On a brief phone call last week to the IR department, the person I spoke with mentioned that MRV was the only company they were aware of with a working 1 gig switch. The recently showed the new technology at the Interop. It is my understanding that they were the only company there with a working switch. This is not to say the others do not have a working switch, only that MRV is not aware of any other company that has one working at this time. (The other companies showing had boxes or incomplete switches at the show)
3.How is R&D? Well, I think the last couple of answers explains it all. MRV seems to be leading the way time and time again. A goal of MRV management has been to come out with the product first, by the time the others catch up, release the next generation.
4.Financially speaking, is the company progressing? Based on earnings alone (I hope this is close, I dont have my cheat sheet handy) the company is progressing at a rate of an additional 30+% per quarter over the previous quarter. Just watch this upcoming quarter. This is the first full quarter of sales for the MegaSwitch II and the first full quarter of sales to Intel.
5.Being a smaller company compared to CSCO, COMS, etc. How can MRV compete? They have a specific product. COMS had made mention of how the switching equipment had made their earnings increase. It makes me wonder,as others, what that will do to MRV's earnings this quarter.
Also, this question was answered by Noam Lotan in a conversation earlier this year. To paraphrase... We really do not compete against the others. We have a few products that we offer versus a huge product line the giants offer. As long as we continue to stay ahead of the others in our field, we will continue to prosper.
6.Is the company expanding or is it stagnant? The last press release answers this question. It is a positive to see MRV expanding within reason. I would love to hear the reason why MRV wants Fibronics. Could it be the GigaHUB with a 12Gbps bandwidth, or they have technology we do not know about yet, or could it be that Fibronics primary marketing channels are in Europe, thus opening new territory for MRV. Couple this with Fujitsu, opening the Asian market, MRV is strategicly aligning themselves with a world wide customer base. With 39%(old number) in global sales, could MRV be trying to raise that number?
7.Is MRVC dependant upon one single customer? NO...MRV, as of the second quarter, does not have one customer they sell over 10% of their product to. By losing their biggest customer they would still be solidly in the black.
8.What is the deal with Intel? I have no idea. My quest in life is to find out what this deal entails. Remember, Intel is the one with a secrecy clause in the contract. Any information released will come from Intel first. The same deal holds true with Fujitsu.
9.How about the stock price swings? Well Dan I found your negative, but even this can be turned into a positive. When the stock price soared after the Cabot debacle, it was evident MRV was not worth the price. I took a lot of heat on the other board for saying this, and even more when I sold everything I had in the company. When the price came back down to realistic levels I started accumulating again. When the price went down to unrealisticly low levels I bought like a fool. And have continued to trade a small amount of shares back and forth, but still holding on to 3/4 of my position long.
Sorry for the long post. I had intended it to be shorter, but every time I start talking about MRV I tend to ramble. Dan, I guess ultimately I am a bit too bullish on MRV as well. I really have tried my best to pick apart this company, but it is extremely hard to do. The one true complaint that I have, stock price, cannot be controlled by the company. Everyone please try to post some negatives or other questions about the company. It will only help all of us understand MRV better. Also I have been known to be wrong. If you find something incorrect in my posts please bring it up for discussion.
Sam |
