Hiram, Hiram, Hiram,
You sound like you're wavering. Say it ain't so!!!
Seems to me from a risk reward perspective that HLIT looks better than ever. To me the thesis we're playing is BW to the home. As I see it, the choices are Coax cable (cable co's), copper wire(telcos), fiber optic (in the future maybe, right now too much moola), and wireless(needs to be debugged and built out).
Everything I've read about ADSL tells me its great in the lab but isn't so great in the field. Coax will win this war. The cable cos just need to build out their infrastructure. We've been wrong in the timing of this build out, but I'm convinced it will happen. Now we can argue as to whether we're on the right horse, but so far I havent been able to find a better one(read more pure play).
As far as the risk goes, HLIT comes out with an operating loss in the fourth quarter, say they will lose money in the 1st quarter, say they don't have great visibilty into the 2nd half of 1998 but they're optimistic that spending will pick back up, and the stock is off a quarter last time I checked. I thought the stock would be down big today. This tells me that all the weak holders are out of this company and it is probably forming a bottom here. What do you think? |
