Research Coverage Initiated on Wavetech (ITEL)- 18 February, 1997
Wavetech, Inc. (STRONG BUY)
(ITEL -- 13/16)
SUPERIOR TECHNOLOGY SHOULD FUEL SUBSTANCIAL GROWTH;
COVERAGE INITIATED WITH A STRONG BUY
INVESTMENT THESIS
ú We are initiating coverage of Wavetech with a STRONG BUY rating and a 12-month target price of $3.25, representing a return on investment of 470%. Wavetech is a computer telephony technology leader and has a growing presence in the increasingly important mobile communications market.
ú Wavetech has successfully increased its marketing efforts and sales in addition to enhancing its technology through a series of strategic acquisitions and alliances.
ú Wavetech has developed superior software to support its feature rich, interactive computer telephony applications, giving it an important competitive advantage.
ú Wavetech has a strong management team and a successful strategy that should assure its success in negotiating the rapidly changing mobile communications market.
ú From a valuation standpoint, Wavetech is trading at a significant discount relative to its peers. The company is trading at 4.5 times our 1998 earnings estimates compared to a peer group average of approximately 38.
ú Wavetech represents a unique investment opportunity in that it is an early stage company with tremendous upside potential, limited risk, and sufficient liquidity. Typically, companies and opportunities such as this are reserved only for the most diligent venture capital funds.
Fiscal Year: 1995A 1996A 1997E 1998E
Revenues ($MM) 0.024 0.020 2.66 10.62
EPS (0.22) (0.17) (0.04) 0.18
P/E NM NM NM 4.46
52-Week Range --------------- 1/4 - 2 1/8
Market Capitalization ($MM)-------- 11.47
Shares Outstanding (MM)------------ 14.11
Book Value Per Share--------------- 0.31
3-Year EPS Growth Rate------------- 283%
Dividend/Yield--------------------- Nil
Price Target----------------------- $3.25
**Full Report available upon request.
cCOPYRIGHT 1997, by Briland Capital Management, Inc.
**This is a preliminary report, a final report will be ready in approximately three weeks.
The information herein is based on sources that this firm believes to be reliable but is not guaranteed and does not purport to be a complete statement of all facts material to an investment decision. This report is for informational purposes and is not a solicitation of orders to purchase or sell any security. Because individual investor circumstances may differ, this report should not be construed as advice designed to meet the needs of any investor. Further, the securities described in this report may not be eligible for offer or sale in certain states. This firm and/or its affiliates, directors, officers, employees, or members of their families may have positions in securities described in this report and may buy or sell or make a market in such securities from time to time. This firm or one of its affiliates has been compensated by the company in this report to provide research and distribution of research. Any opinions expressed in this report are subject to change without notice. |
