Mike --
I bought WSTL a few weeks ago and had never compared the numbers to Amati's till yesterday when WSTL's annual report arrived. They're not all that different when it comes to losses. The companies shouldn't be compared, though. WSTL is a system's integrator, not a developer of patented technology. If the ADSL solution were a race car, Westell is the guy who takes all the pieces, puts them together, tweaks them a bit, and sells the final product. They have to buy the engines from Amati, or Motorola, or ADI, or Orckit, or Aware (though, I'd have to have proof on that one). Most of these companies sell ordinary GM and Ford engines (DMT without the standards-based Amati add-ons). Only one company has the Bugatti engine: Amati. And they're required to license the blueprints (sticking to my analogy) to anyone who wants at a reasonable fee. So how can you compare Westell to an Amati? It's almost like apples and oranges.
This is not to say Westell isn't a good company or won't do well. I believe it plays an important part in the rollout of ADSL. I like the position it has within the community. I think it will be a good investment if for no other reason than the alliance with Motorola. Kevin Slocum at Soundview said it's oversold at today's levels and I agree.
Regards,
Pat |
