Thanks for compliment, from what I read regarding PMCS, they make circuits and chips that go into WAN networking equipment mainly ATM switches and routers. Another company that does the same thing more specialized is VTSS, they make Ga Arsenide technology based chips into ATM switches. When you go into the details it gets confusing and is difficult to evaluate their future. They may even get commoditized. But equipment vendors like ASND combine both hardware and management software and pass on the improved pricing to the customers.
One reason I like ASND over COMS, MRVC and even CSCO is that The already have majority of the TELCOs and large ISPs as their customers. The products they sell to the TELCOS and large ISPs have higher margins than the consumer oriented companies such as COMS, BOCA ETC..
As the industry consolidated that leaves few large ISPs and TELCOs who already have ASND equip. they will continue to upgrade their eqip. Examle of large ASND customers, WCOM/UUNET, NOW MCI when it merges, recent GTE ATM contract(won over CSCO), LCI+QWST, NIPPON TT, BT, WILLIAMS COMM, at least 4 baby bells, AT&T, FRANCE TELECOM, DEUTSCHE TELECOM, PSINET, EARTHLINK, CHINESE TELECOM, and the list goes on. I think they have proven to me that they are a force to reckon with. In fact CSCO does not command such a list in TELCOs, they are very strong in enterprise neworks fortune 500 companies.
If the management can execute their business plan aggressively, and market themselves they can become a huge success story.
Keep our fingers crossed and hope for the best.
If joe the six pack understands all of the above ASND would have a PE of 50-60. But eventually earnings will take care of the rest.
I do not know much about MRVC, but from what I read they are a player in LAN networking, which is a lower margin business like COMS, that may explain why the PE is low on that one.
Good luck to you with your longs.
Never short a company like ASND. I always thought DELL was overvalued, but the market keeps expanding and the PE keeps expanding taking DELL to dizzying heights. I think DELL is more risky than ASND, since anybody can imitate DELL model nothing proprietary. with ASND they have some proprietary designs and NETWORKING MANGEMENT, QOS software etc.
Wishing you well,
BR |
