AVTC:
This stock is too much like gambling at the current time. It revenue model means it can can come in light at any time. Only a new stream of products would give it 1 or 2 quarters of visibility. So till it has substantial new products in the pipe line I would look for another trade.
From recent 10Q:
"Most of our software product revenue comes from current quarter orders and sales, of which a substantial portion, and sometimes a majority, occurs in the last month of each quarter. We do not maintain a large backlog of orders, and most of our distributors maintain little or no inventory. Order fulfillment cycles are typically short, and often as short as one to two days.
Because our expenses are relatively fixed in the short term, we may be unable to adjust our spending in time to compensate for any unexpected shortfall in quarterly revenues. "
This does look to be changing anytime soon.
R&D expenses seem pretty low for a company that has declining revenues. Seems like a company cutting back on R&D in a very competitive market in order to control expenses. This does not suggest that they have good pipeline of new products ready to come to market soon.
"Research and development. As a percentage of sales, research and development expenses for the current quarter increased to 9.9% compared with 7.4% of net sales in the comparable prior-year quarter. Research and development expenses increased to $2,494,000 in the quarter ended June 30, 2000 from $2,357,000 in the comparable prior-year period.
For the six months ended June 30, 2000, research and development expenses decreased from $4,978,000 in the six months ended June 30, 1999 to $4,957,000 in the current period. As a percentage of net sales, research and development represented 9.9% for the six months ended June 30, 2000, as compared to 8.2% in the comparable prior-year period"
Gross margins increasing with increases in SG&A. This means they are putting more emphasis in marketing on their current new products. This is good. No opinion on the quality of their products.
"Gross profit. Gross profit as a percentage of net sales improved to 66.1% in the quarter ended June 30, 2000, as compared to 64.5% in the comparable prior-year quarter. The increase in gross profit as a percentage of sales reflects the greater contribution from software and kit sales verses full system sales primarily from the CTG product lines. "
"Sales, general and administrative. Sales, general and administrative expenses increased to $11,724,000 in the quarter ended June 30, 2000 from $11,073,000 in the comparable prior-year quarter, due primarily to increased personnel-related costs as the company continues to invest in an enterprise level sales force and support structure. Sales, general and administrative costs for the current quarter represented 46.5% of net sales, an increase from 34.8% in the comparable prior-year quarter.
For the six months ended June 30, 2000, sales, general and administrative expenses increased to $22,551,000 from $21,350,000 in the comparable prior-year period. As a percentage of sales, general and administrative expenses were 45.0% and 35.2% of net sales for the six-month periods ending June 30, 2000 and 1999, respectively. "
Given the list of competitors, it is hard to believe they have a best of class product.
"In the telephony-oriented market for messaging systems, our principal competitors are independent suppliers such as the Octel Messaging Division of Lucent Technologies, Inc. (now Avaya), Mitel Corporation, Active Voice Corporation, and Callware Technologies, Inc.
In addition to independent suppliers of computer-telephony solutions, we also compete with private branch exchange and key telephone systems manufacturers. Those manufacturers offer integrated voice messaging systems, unified messaging systems and automatic call distribution systems of their own design or under various OEM agreements. Competitors in this category include Lucent Technologies, Inc. (now Avaya), Nortel Networks Corporation, Siemens Business Communication Systems, Inc., Mitel Corporation and NEC America, Inc.
In the market for LAN-based facsimile systems, our principal competitors are Omtool, Ltd., Optus Software, Inc., Esker, S.A. and Computer Associates International, Inc. Our fax server products also compete with vendors offering a range of alternative facsimile solutions, including operating systems containing facsimile and document transmission features, low-end fax modem products, desktop fax software, single-platform facsimile software products and customized proprietary software solutions. In the market for production facsimile systems, our principal competitors are Biscom, Inc., Esker, S.A. and Topcall International AG. In the market for document distribution products, our principal competitors include the Xpedite division of PTEK Holdings, Inc. and other telecommunications providers such as AT&T Corp., MCI WorldCom, Inc. and Cable & Wireless, Inc. "
A lot of people bought around 12-13 in the last 6 months, so major resistance will be there.
cnetinvestor.com
Fair value is $14.80 this year and $22.00 next year.
biz.yahoo.com
Company is cash flow positive and has 85 million in cash and very little debt.
"Cash provided by operating activities in the six months ended June 30, 2000 was $15.0 million due primarily to continuing profitable operations and collections on accounts receivable as compared to $13.7 million in the comparable prior-year period. The accounts receivable collection period was approximately 45 days at June 30, 2000. Accounts receivable decreased from $20.3 million at December 31, 1999 to $14.1 million at June 30, 2000"
This stock is still building a base. It would wait for the volume to appear before taking a position. I don't really like the business they are in. For a pure technical play, it would be safer to trade up to the gap at 16 on a break out above the resistance level at 12.
207.61.23.98 |
