From back in March for WFII from Worldly investor:
worldlyinvestor.com Sector of the Day
Wireless Facilities Offers a Tech Triple Play
By Casey Freymuth, Telecom Columnist
Uniquely positioned Wireless Facilities handles enabling, wireless and Internet services.
As we roll into the next century, nearly all the hottest telecom plays are enabling plays, wireless plays or Internet plays. One company that has been roaring up the charts as of late covers all those angles.
If you haven't flagged Wireless Facilities (Nasdaq:WFII - news) for investment consideration, it's time to roll this firm into your research list.
Wireless Facilities, which recently went public, is a unique play with no true comparables. There's potentially enormous top line and earnings growth and the company is at the forefront of the broadband-wireless movement.
Wireless Facilities delivers network planning and design, deployment and ongoing maintenance to the wireless-communications industry. Founded in 1995, the company rapidly positioned itself in the wireless arena.
Reportedly, the company participated in the design and deployment of approximately 20% of the cell sites deployed in the US in 1998 and completed development projects in more than 25 countries by the end of last year.
Creme de la Creme
The company maintains a who's who list of wireless customers in both the service-provider and vendor spaces, including Nextel (Nasdaq:NXTL - news) AT&T (NYSE:T - news), Vodafone Airtouch (NYSE:VOD - news), Triton PCS (Nasdaq:TPCS - news), Qualcomm (Nasdaq:QCOM - news) and Lucent (NYSE:LU - news).
When wireless meets Internet, the future unfolds, and some of the more compelling customers Wireless Facilities holds among its base of 100 wireless players are broadband-data leaders -- Metricom (Nasdaq:MCOM - news), Advanced Radio Telecom (Nasdaq:ARTT - news), NextLink (Nasdaq:NXLK - news), and CommcoTec, a newly formed data-network company in Stamford, Conn.
As an early mover in the enabling space, Wireless Facilities leveraged its position to get in on the ground floor with these firms. The company will grow with these customers as they achieve market penetration. In fact, Wireless Facilities expects wireless data to represent 50% of total revenues by year end.
This positioning advantage is significant from a strategic perspective. With no direct comparables for Wireless Facilities, Chase H&Q, in its coverage initiation, advised potential investors to develop a hybrid comparable list of Internet service firms Scient (Nasdaq:SCNT - news), Viant (Nasdaq:VIAN - news) and Sapient (Nasdaq:SAPE - news), and wireless-network companies Advanced Radio Telecom, Teligent (Nasdaq:TGNT - news) and WinStar (Nasdaq:WCII - news).
When a company's market position is unique and the closest comparables analysts can find are wireless and Internet highfliers lumped together, it's a rare opportunity presented to investors.
Enabled for Growth
Of course, position is only half the battle. Execution is where the rubber meets the road. On this front, Wireless Facilities is driving home results that clearly demonstrate the firm's ability to leverage a unique market position.
Fourth-quarter revenues rose 50% from the latest third quarter and grew 120% from the year-ago fourth quarter. Earnings per share beat analysts' expectations by more than 60%.
This is just the beginning. As an early mover in its markets, the company is well positioned to experience substantial growth as wireless services are deployed and upgraded in the US and abroad.
Additionally, the company has shown a willingness and ability to successfully execute strategic acquisitions when necessary. Wireless Facilities agreed in January to acquire wireless professional-services firm Walter Group for $10.5 million and last week agreed to obtain and operate the resources of Ericsson's (Nasdaq:ERICY - news) network operations center in Dallas.
Waiting Until the Qualcomm Home
On the heels of Qualcomm's historic run last year, another powerful wireless play has emerged. Wireless Facilities is blowing through initial and secondary price targets -- most recently $80 -- like a bull through wet paper.
Obviously, it's premature to peg the company as the next Qualcomm play for investors, but a firm has only to deliver a fraction of the return Qualcomm has to award significant returns to shareholders. Wireless Facilities has demonstrated some of the volatility of young tech companies and is currently trading just under 100, off a recent high of 163 1/2.
I like this play, however, and believe it's definitely worthwhile to perform some research on Wireless Facilities and discuss the company with your investment advisor.
Casey Freymuth is president of Group IV Inc., a Phoenix-based consulting, research and publishing firm specializing in strategic and operational matters for global telecommunications, utility and Internet companies. His weekly column uncovers investing opportunities in telecom stocks. He does not own shares of Wireless Facilities.
Go to www.worldlyinvestor.com to see all of our latest stories.
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More Quotes
and News: Advanced Radio Telecom Corp (NasdaqNM:ARTT - news)
AT&T Corp (NYSE:T - news)
Ericsson, Telefonab. L M AB (NasdaqNM:ERICY - news)
Lucent Technologies Inc (NYSE:LU - news)
Metricom Inc (NasdaqNM:MCOM - news)
Nextel Communications Inc (NasdaqNM:NXTL - news)
NEXTLINK Communications Inc (NasdaqNM:NXLK - news)
Qualcomm Inc (NasdaqNM:QCOM - news)
Sapient Corp (NasdaqNM:SAPE - news)
Scient Corp (NasdaqNM:SCNT - news)
Teligent, Inc (NasdaqNM:TGNT - news)
Triton PCS Inc (NasdaqNM:TPCS - news)
Viant Corp (NasdaqNM:VIAN - news)
Vodafone Airtouch PLC (NYSE:VOD - news)
Winstar Communications Inc (NasdaqNM:WCII - news)
Wireless Facilities Inc (NasdaqNM:WFII - news)
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