Found this research article on CELL from JW Genesis (don't know much about them), published today. Looks like a solid buy recommendation.
JWGenesis
CAPITAL MARKETS, LLC
909 MONTGOMERY STREET, SUITE 600, SAN FRANCISCO, CALIFORNIA, 94133
TELEPHONE: (415) 677-1500, FACSIMILE: (415) 391-0287
Research Notes
INSTITUTIONAL EQUITY RESEARCH
www.jwgenesis.com October 20, 1998
Brightpoint, Inc. (CELL $10 1/8)
1997A 1998E 1999E STRONG BUY
EPS Est. FY: Jan. $0.51 $0.80 $1.05 (Disclaimers: 1,3)
§ We reiterate our STRONG BUY recommendation on shares of Brightpoint. Even though the shares have appreciated from their recent bottom, we recommend investor purchase in front of
Thursday's earnings announcement.
The shares have traded-off sharply since peaking in late April at $21 ¼. The decline came despite solid top-line and earnings growth in both the second and third quarters. We expect Brightpoint to once again demonstrate the strength in its franchise when it reports Q3:98 results. We forecast EPS of $0.20 on revenue of $375 million in Q3:98, compared with EPS of $0.12 on revenue of $243 million in Q3:97 and EPS of $0.17 on revenue of $330 million in Q2:98. § We expect Brightpoint to report substantial sequential strength in its sales into the Asia/Pacific region and into Europe. As investors will recall, sales into these markets were capped last quarter by management's attempt to remove intermediaries from the channel. This strategy not only introduces new disciplines to perilously fragmented markets, but also supports higher marginal profitability for the company. This strategy should yield sequential revenue growth on the order of
30% plus in the Asia/Pacific region and 10% plus in Europe.
§ Clearly, the shares have not kept pace with the company's fundamental performance. We attribute this to three factors: the company's exposure to international markets; the company's operating model, which has little margin for error; and the constraints the company's rapid growth has put on its cash flow. Nevertheless, the company continues to post record revenue and profitability. |
