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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: geoffrey Wren who wrote (44957)	10/13/2011 11:45:04 PM
From: Jurgis Bekepuris	Respond to of 78644

FKWL - It is cheap based on cash value and current earnings. Couple questions/observations - They have 7M receivables. Who are they from? - Their cash flows are all over the place. Is that lumpy contracts or something more to it? - Their FTI acquisition is rather weird. What do you think happened? They are still increasing the position by buying a convertible that was converted into shares. Is this a good use of money? How do you interpret "On October 15, 2009, we opened a branch office in Seoul, South Korea, a wholly-owned subsidiary of Franklin Wireless that manages certain logistical and administrative efforts for the Company. The Korea-based business office has been inactive since September, 2010." (from 10K yahoo.brand.edgar-online.com ) - Why there was a huge sales jump in 2010 but the earnings were exactly the same as on much lower sales in other years? - AT&T and Verizon are conspicuously absent from the list of companies that certified FKWL modems. Comments? - Sprint accounts for 59% of sales. I really don't like that much concentration, especially in Sprint, which is IMHO a very erratic and not well managed company. Sprint purchases may explain the huge jump in 2010 while margin dropped. It's also possible that A/R are at Sprint, which also raises the question whether that sales channel is still stuffed. - The whole situation with C-Motech, which still owns 13% of the company shares is weird. FKWL may have to purchase these shares from C-Motech. Overall, I think I will pass for now. However, it might be a great buy if they get another big contract somewhere.