Is this a delay or a failure? That is the key issue.
If it is a delay, we would all be fools to get out right before the ramp up. If it is a failure to benefit from the ramp up, we can't sell soon enough.
I am betting on just a delay. They said orders were up, and it is common knowledge that cable spending is increasing. For them, international means Canada and Europe, and I don't see those two as damaged economies. New products are coming on line and getting orders, but they have lower margins. The company went to several trade shows, and thus SG&A was higher.
The key factor is revenue growth. It was below estimates, but not by that much ($800K below Bear Sterns and Warburg). The company is confident of growth, but unsure of how much. I also think HLIT would be an easy company to sell if management thought they could not go it alone.
For now, I will hold my position, as my investment thesis is still in tact. We may have let our hopes set our expectations too high. But hopefully we won't let that affect our investment decision making.
Regards,
Archer |
