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Technology Stocks : Acme Packet (APKT) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Chiu who wrote (120)	3/21/2007 3:05:09 PM
From: bob zagorin	Read Replies (1) \| Respond to of 291

bot some APKT today... Hard-To-Resist Triple Play Offers Jim Oberweis, The Oberweis Report 03.02.07, 3:00 PM ET Talk about a disruptive technology and a case where new economy seems destined to trump old: VoIP, a technology that’s been around for a while, is finally gaining traction and cannibalizing Thomas Edison’s "two tin cans and a string" version of the telephone. It seems that people are getting rid of their phone lines in droves, sending good old Ma Bell and her monopoly game the way of the eight-track tape. With VoIP (voice over Internet protocol), your voice is converted into a digital signal that travels over the Internet. If you are calling a regular phone number, the digital signal is converted to a regular telephone signal before it reaches the destination. Hansen Natural. Netease.com. These are just a few of Jim Oberweis' 10-bagger stocks. Click here for four new buys in the Oberweis Report. In the last year or so, quality of VoIP has dramatically improved. I find it virtually indistinguishable from traditional landline connections. At my home, we’ve replaced our regular phone service with a VoIP connection. Our VoIP line uses regular phones connected to a special adapter in the basement. The price is right--around $35 bucks a month--for unlimited calls around the world. Special Offer: Jim Oberweis has given subscribers timely buy recommendations on stocks that went on to appreciate 1,000% and more. Click here for his latest picks, including a small manufacturer of server networking adapter cards and network-based communication devices for portable and remote computers… this month in the Oberweis Report. That said, I’m not sure there will be any real winners among the IP telephony service providers. We believe IP telephony is a commodity product differentiated by price, which is not our cup of tea from an investment standpoint. For example, pure-play provider Vonage (nyse: VG - news - people ) has been a real turkey of a company and a stock, lacking both profits and a stock with the ability to defy gravity. To avoid customer attrition and compete with upstarts like Vonage, traditional telecom companies such as Verizon (nyse: VZ - news - people ) and AT&T (nyse: T - news - people ) are themselves forced to build IP networks designed to cannibalize their existing core wireline business. While service providers don’t seem to offer a compelling investment opportunity, the companies that make all the stuff that enables VoIP networks are faring better. IP networks combine voice and data on one single network, allowing telecommunications companies to simultaneously offer TV, Internet and digital telephone across a single broadband connection. Industry bigwigs have labeled this trifecta of offerings the "Triple Play." VoIP is causing an exponential increase in demand for bandwidth, gobbling up much of the overcapacity left after the Internet bubble burst. Traditional carriers recognize that they have to convert or die, and virtually everybody in telecom is focused on building out their IP networks and delivering broadband directly to your home. That takes lots of investment and equipment. It represents, we believe, the renaissance of the telecommunications equipment industry after six long years in the doldrums. Irrespective of how the provider game ends up, we think that the IP network build-out is real, and those making products to enable efficient and secure expansion of bandwidth are likely to perform well. We are seeing confirmation in the numbers--earnings for network equipment companies were exceptionally strong this quarter. Among our favorite beneficiaries is Acme Packet (nasdaq: APKT - news - people ), a company which develops session border controllers for IP networks. Session border controllers rest on the edge of the network and help to control traffic flow and Acme is the market leader. They went public last October, and while the stock price is higher now, earnings growth has been strong. Revenues for the first nine months of 2006 grew 158% year over year to $60.4 million. Another good choice is Oplink Communications (nasdaq: OPLK - news - people ), a high-growth provider of optical network components. Israel-based Allot Communication designs IP network optimization appliances, which also help to manage network traffic. Special Offer: Looking for safety from the stormy market? Click here for Jim Stack's buy list of recession-proof stocks and funds in the latest issue of Investech Research. Yet another beneficiary is OPNET Technologies (nasdaq: OPNT - news - people ). Opnet is an analytic-driven network management software provider. A hot stock in 2000, shares have languished during the slow telecom cycle but it is well-poised for growth once again. One big name that we think is worthy of consideration: Cisco (nasdaq: CSCO - news - people ). As the market leader for routers, exponential growth in traffic will likely stimulate sales in the years to come, yet the stock’s P/E of 21 is still at the low end of its historical range. No matter how you think the IP telephony game will play out, there is no question bandwidth requirements are on the rise. Providers of solutions to the bandwidth bottleneck have the wind at their back. Now is the time to put up your sail. Excerpted from the current issue of The Oberweis Report. Click here for more analysis by Jim Oberweis and to subscribe to The Oberweis Report.