SWIR is NVTL's main competitor, so we know its industry rather well. Both companies make the little modems and antennas that allow us to have mobile internet, provided by a mobile communications operator, like Vodafone in Europe and Sprint in the US, for example.
SWIR is actually a bit cheaper than NVTL now, if we compare market caps, revenues and net profit margin trends, I would say SWIR is trading with a discount of about 20% relative to NVTL (but they're both very attractive). Here's my valuation model for SWIR:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39334;image)
SWIR dilutes a bit less than NVTL, is growing revenues at about the same rate and I expect both companies to have the same net profit margin of 8% and trade at the average industry EPS multiple of 25.35.
One of the things I like about NVTL and SWIR is visibility. There's no way this mobile internet trend will stop, everybody loves mobile internet (but not many people already have it, it takes time for consumers to adapt). Laptop computer sales are also growing much faster than desktops. This mobile internet is another way of mobile operators to steal business from the fixed line operators (and cable operators), now they're after the internet connection business. And they both sell for roughly the same price, the mobile & the fixed internet connection. If they both have the same quality, which one are you going to choose, especially if you're being bombarded by advertising from mobile operators? The mobile connection.
But, for mobile operators to sell their mobile connection monthly subscription fee, they need NVTL's or SWIR's products. I think it won't take long for laptops to be sold already with a mobile internet connection, the way it happens with mobile phones. Imagine "I'm going to buy an HP laptop with a Sprint internet connection for $100 dollars less. I just have to stay loyal to Sprint for one year".
Technically SWIR broke down badly on Friday, because of an analyst downgrade and the general market weakness. Well, I don't expect the general market weakness to last much longer and in fact, I expect the S&P 500 to end the year above the highs it made recently, as you can read on my latest remarks about the general market: Re: About the general market slump yesterday (http://www.3stocksonfire.org/trading/index.php?topic=10059.msg103334#msg103334)
The trading plan is:
Buy SWIR, 6.66% of capital, as always.
>:D
Sierra Wireless "market outperform," target price raised
Monday, July 30, 2007 11:08:06 AM ET
JMP Securities
NEW YORK, July 30 (newratings.com) - Analysts at JMP Securities reiterate their "market outperform" rating on Sierra Wireless Inc (SWIR.NAS), while raising their estimates for the company.
The target price has been raised from $27.50 to $32.00.
In a research note published on July 27, the analysts mention that the company has reported its F2Q07 GAAP EPS ahead of the consensus. Sierra Wireless' revenues grew 26% due to robust demand for the company's recently launched USB products, the analysts say. JMP Securities believes that the company is well positioned to benefit going forward from increasing adoption of 3G broadband services. The GAAP EPS estimates for FY07 and FY08 have been raised from $0.93 to $1.02 and from $1.23 to $1.29, respectively.
&
Sierra Wireless "buy"
Monday, July 30, 2007 8:42:42 AM ET
Morgan Joseph & Co
NEW YORK, July 30 (newratings.com) - In a research note published on July 27, analyst Kevin Dede of Morgan Joseph reiterates his "buy" rating on Sierra Wireless Inc (SWIR.NAS).
The target price is set to $30.
Sorry, I forgot SWIR's update, it has been a tough day today in my personal life. SWIR is rising 2.4% today, which is good, considering yesterday we've had a doji candlestick that may mean the short term trend is about to change, from bearish to bullish.
It is helping to compensate NVTL's fall due to another downgrade.
I'll hold SWIR.
For now it's still down. Read the story and I'm interested.
I also think there is no way this mobile internet trend will stop. Also think of working from everywere to avoid the traffic jams. At least in Holland this is happening.
Got in at 22,47.
Now I only need to find a way to follow the updates from my holiday address in Italy next week ??? ??? :)
Amarens
QuoteI also think there is no way this mobile internet trend will stop. Also think of working from everywere to avoid the traffic jams. At least in Holland this is happening.
Is it? Holland is usually the first in everything ;)
QuoteNow I only need to find a way to follow the updates from my holiday address in Italy next week ??? ??? :)
Italy? Sounds great ... well, I send the daily newsletter by private message too, so you just need to go to a cyber coffee before the open and check out www.3stocksonfire.org.
Or else have a mobile internet connection with roaming :) (I'm sure this will be available in the future).
As for SWIR, I believe the stock is bottoming and will be above $30 before the year closes. I'll keep holding it.
Quote from: David Randolph on August 01, 2007, 07:36:49 AM
Italy? Sounds great ... well, I send the daily newsletter by private message too, so you just need to go to a cyber coffee before the open and check out www.3stocksonfire.org.
Or else have a mobile internet connection with roaming :) (I'm sure this will be available in the future).
Think I'll do the cyber cappucino ;)...
Sure a connection with roaming will be available too. But David, how about the possibility of receiving a text message with the updates (just the hold or sell info) in the nearby future, included in the service. Have that from my broker too for the Dutch stocks and it works great. Maybe something to look into.
Quote from: David Randolph on August 01, 2007, 07:36:49 AM
As for SWIR, I believe the stock is bottoming and will be above $30 before the year closes. I'll keep holding it.
Well, looks like it's bottoming a little more. And I thought I bought at the bottom this time >:(, should have known better... ;)
We'll wait and see.
Amarens
QuoteSure a connection with roaming will be available too. But David, how about the possibility of receiving a text message with the updates (just the hold or sell info) in the nearby future, included in the service. Have that from my broker too for the Dutch stocks and it works great. Maybe something to look into.
That's a good idea Amarens, I'll have Ramsburg take a look at it and see if it is technically in our reach or not. Thanks :)
QuoteWell, looks like it's bottoming a little more. And I thought I bought at the bottom this time Angry, should have known better... Wink
We'll wait and see.
Amarens
Yeah, bottoms are always extremely hard to catch. It seems like everyday, for one reason or another, the Main is getting a 10% punch in the stomach from one of its holdings.
But it is still up 9.8% for the year, compared with 3.35% for the year, despite all the troubles. This year is shaping up to be more difficult than I thought, but I remain confident that one or two star holdings will push the Main up 30% for the year when everything closes.
SWIR went down 9.5% yesterday, to touch its 50% Fibonacci retracement level, which normally ends an healthy correction. We'll see if that's the case or not.
SWIR is expected to earn EPS of $1.02 in 2007 and $1.25 in 2008. But I expect a lot more for 2008, not a slowdown in growth, but even stronger growth. Anyway, analysts are expecting just 22.5% growth in EPS in 2008, even though in 2007 it will grow about 168%, from $0.38 EPS in 2006.
I believe the stock is quite cheap, considering its growth rate, which I expect to be maintained or even accelerate going forward.
I'll keep holding SWIR, despite the setback.
Thanks. Will see if Ramsburg can make it work. Don't know about others, but I would be willing to pay for the message. One should be able to switch the service on or off per day. Anyway, in Holland all online brokers (www.binck.nl and www.alex.nl) have this service. Some of the banks are looking into in too.
Looks like SWIR found some trendline ;)
Amarens
QuoteLooks like SWIR found some trendline ;)
It sure did Amarens, nice 6.9% rally :)
Perhaps it will take some time to build a base, but I expect SWIR to move towards $30 by the end of the year and I'll keep holding.
Zacks update:
Zacks.com
Buy Reiterated on Sierra Wireless
Friday August 3, 3:13 pm ET
By Zacks Equity Research
Wireless services company Sierra Wireless (NasdaqGM: SWIR - News) continues to warrant a Buy rating from Zacks senior telecommunications analyst David Weissman, CFA. We wanted to find out why, so we looked into his latest report:
Higher usage for wireless broadband Internet access, and widespread deployments of 3G wireless technology have enabled Sierra Wireless, a leading provider of OEM [original equipment manufacturer] wireless modem cards and access solutions, to announce strong second quarter 2007 financial results. Precipitous demand for wireless modems interfacing with mobile devices and laptops generated better-than-expected sales for the company\'s USB products.
The acquisition of AirLink Communications diversified Sierra\'s business opportunities with a significant contribution to overall gross margin levels. Sierra Wireless extended it business channels to provide multiple products to several large wireless carriers. We believe the long-term growth prospects remain firm as telecom carriers are increasingly deploying high-speed 3G networks on a global basis.
We maintain our Buy recommendation and raise our valuation target for Sierra based on its recent performance and improved earnings visibility. The current valuation does not adequately reflect Sierra\'s true business potential moving forward. We therefore raised our six-month valuation target to $28 based on EV [enterprise value]/Sales of 1.6x to our 2007 estimated sales, at par with its nearest competitor Novatel Wireless (NasdaqGM: NVTL - News).
Quote from: la-onda on August 04, 2007, 03:28:34 AM
Zacks update:
Zacks.com
Buy Reiterated on Sierra Wireless
Friday August 3, 3:13 pm ET
By Zacks Equity Research
Wireless services company Sierra Wireless (NasdaqGM: SWIR - News) continues to warrant a Buy rating from Zacks senior telecommunications analyst David Weissman, CFA. We wanted to find out why, so we looked into his latest report:
Higher usage for wireless broadband Internet access, and widespread deployments of 3G wireless technology have enabled Sierra Wireless, a leading provider of OEM [original equipment manufacturer] wireless modem cards and access solutions, to announce strong second quarter 2007 financial results. Precipitous demand for wireless modems interfacing with mobile devices and laptops generated better-than-expected sales for the company\'s USB products.
The acquisition of AirLink Communications diversified Sierra\'s business opportunities with a significant contribution to overall gross margin levels. Sierra Wireless extended it business channels to provide multiple products to several large wireless carriers. We believe the long-term growth prospects remain firm as telecom carriers are increasingly deploying high-speed 3G networks on a global basis.
We maintain our Buy recommendation and raise our valuation target for Sierra based on its recent performance and improved earnings visibility. The current valuation does not adequately reflect Sierra\'s true business potential moving forward. We therefore raised our six-month valuation target to $28 based on EV [enterprise value]/Sales of 1.6x to our 2007 estimated sales, at par with its nearest competitor Novatel Wireless (NasdaqGM: NVTL - News).
Thanks for the useful information la-onda :)
SWIR closed down 3.8% yesterday, but then it rose 3.26% in after hours trading, in sympathy with NVTL's better than expected earnings.
Given NVTL's increase in full year 2007 revenue and EPS guidance, I guess those analysts calling for a 2nd half slowdown were wrong, as both companies keep surprising on the upside, due to increasing demand for their products.
I'll continue holding SWIR, despite the short term technical weakness.
SWIR rose even more than NVTL on NVTL's great quarterly results and guidance, which is a very good technical sign. I sincerely believe the bottom is in for SWIR and I expect the stock to start moving higher from this point. Of course, the dip was deeper than I initially thought, and I would have done better if I waited for the dust to settle and buy when there were clues the stock was turning North again, but ... I make mistakes like everybody else.
I'll keep holding SWIR for the long term.
A bit of a pullback on SWIR yesterday, no big deal. I'll continue holding the stock.
It will be hard for SWIR to sustain that ascending trendline, the way the S&P 500 is set to open. We'll see.
If it falls some more SWIR will be at the same levels before the surge in demand for its products happened, it's just silly for the market to behave this way, like if specific businesses didn't count, only the general market trend.
I believe that over time investors will start separating the good from the bad, the industries and companies that will grow revenues and earnings from the ones that will see their numbers contract or turn negative, like it will probably happen to many banks.
I'll continue holding SWIR.
Bell launches newest wireless PC card, continues high speed mobile data network expansion
Friday , August 10, 2007 13:40ET
TORONTO, Ontario, Aug. 10, 2007 (Canada NewsWire via COMTEX) -- Sierra Wireless AirCard(R) 595 PC card now available from Bell Mobility
Bell today announced ongoing speed enhancements to its high speed mobile data network, supported by the newest addition to its mobile broadband devices: the Sierra Wireless AirCard(R) 595 PC card.
The fastest wireless data network available across Canada, offering peak upload speeds of up to 1.8 megabits per second (Mbps) and peak download speeds of up to 3.1 Mbps, the Bell high speed network offers data clients the most convenient mobile access to e-mail, the Internet or corporate networks available. The network now covers 68 per cent of the Canadian population, with further expansion and enhancement to come in 2007.
"The ongoing upgrades to the Bell high speed wireless network underscore the growing importance of mobile data and how it's changing the manner in which Canadians conduct business," said Adel Bazerghi, VP Products for Bell Mobility. "Bell is leading the way in providing the fastest mobile broadband access to its clients across Canada."
Sierra Wireless AirCard 595 PC card
Operating on Bell's enhanced high speed data network, the AirCard 595 PC card by Sierra Wireless provides great benefits for media streaming and emailing very large files. And where the newest high-speed enhancements are not available, the AirCard 595 is backward compatible with earlier data network technology and will seamlessly connect at the fastest speed possible.
"The EVDO Rev A technology in the AirCard 595 is a great advancement for those who depend on their wireless data connection to send information while working remotely," said Dan Schieler, senior vice president of worldwide sales for Sierra Wireless. "We are pleased to work with Bell Mobility to offer Canadian customers a powerful mobile broadband connection that can deal effectively with the information they need to share."
The AirCard 595 also offers a fixed, high-performance antenna design for highest speeds and reliability, and support for Microsoft Windows XP, 2000, and Mac OS X (visit www.sierrawireless.com/mac to download Mac OS X support software).
The AirCard 595 is available for $99.95 on a three-year contract. Until Aug. 30, new three-year activations will also receive $50 off when clients opt for the $99/month 1GB rate plan. Clients can also benefit from Bell's offer of three months of Unlimited Data Usage for PC Card users who subscribe on a three-year term.
To learn more about the Bell high speed wireless data network and the Sierra Wireless AirCard 595, please visit www.businessonthego.ca.
Thanks for posting the news la-onda :)
I particularly enjoyed the website provided, www.businessonthego.ca, which explains very well why demand for SWIR's products is soaring.
I had to adjust my ascending trendline a bit, but I guess SWIR is now ready to have a white marubozu, now that the general market seems to have stabilized.
As with NVTL, analyst's expectations for 2008 aren't all that optimistic:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39651;image)
I think they will have to move their 2008 expectations up, as they've been doing in 2007. The company's business is just getting traction and I expect very strong growth in 2008 and 2009.
We'll see. I'll keep holding SWIR.
Nothing new for SWIR yesterday, the stock rose 2.2% but it seems there's still some more work to do before pushing higher. Anyway, I'll hold SWIR for the long term due to fundamental reasons.
SWIR continues to consolidate around current levels because the general market isn't letting it trend higher. Anyway, I believe we're close to the bottom in the general market and SWIR should move towards $30 by year's end.
I'll continue holding SWIR for the long term.
Unfortunately SWIR continues to head down and it fell 4.8% yesterday. As I've been writing, if it falls some more it will be like the surge in demand for its products never happened, like mobile internet never existed.
But it exists and SWIR's revenues grew from $107 M in 2005 to an estimated $417 M in 2007. And there are studies saying the mobile internet connection will keep growing 50% a year, on average, for the next 5 years and I share the same vision, don't you?
So there's no way SWIR is worth just $515 M.
The way irrationality is going in this market I would say it will go up as fast or even faster than it came down. I expect a massive blow of the all time high in the S&P 500 by year's end or beginning of 2008.
I'll continue holding SWIR for the the long term.
I hate the market but I love SWIR
SWIR: JMP Sec Ups to Strong Buy from Mkt Outperform; Sets Tgt @ $32; Analyst Notes
Thursday , August 16, 2007 14:39ET
Issuer: Sierra Wireless, Incorporated (NasdaqNM: SWIR)
Analyst Firm: JMP Securities
Ratings Action: UPGRADE
Current Rating: Strong Buy (from Mkt Outperform)
Target Price: $32.00
Analyst Comments: The firm is raising their rating on Sierra Wireless Strong Buy as Sierra prepares to capitalize on new opportunities at Verizon Wireless (VZ), increased marketing efforts from AT&T (T), solid summer vacation connectivity, and back to school and holiday demand trends. As the market for 3G data cards continues to accelerate and expand, they are maintaining a FY07 GAAP EPS estimate of $1.02 versus the consensus estimate of $1.00.
Nice chart action today imho
holding with you David
Quote from: la-onda on August 16, 2007, 09:18:20 PM
I hate the market but I love SWIR
SWIR: JMP Sec Ups to Strong Buy from Mkt Outperform; Sets Tgt @ $32; Analyst Notes
Thursday , August 16, 2007 14:39ET
Issuer: Sierra Wireless, Incorporated (NasdaqNM: SWIR)
Analyst Firm: JMP Securities
Ratings Action: UPGRADE
Current Rating: Strong Buy (from Mkt Outperform)
Target Price: $32.00
Analyst Comments: The firm is raising their rating on Sierra Wireless Strong Buy as Sierra prepares to capitalize on new opportunities at Verizon Wireless (VZ), increased marketing efforts from AT&T (T), solid summer vacation connectivity, and back to school and holiday demand trends. As the market for 3G data cards continues to accelerate and expand, they are maintaining a FY07 GAAP EPS estimate of $1.02 versus the consensus estimate of $1.00.
Nice chart action today imho
holding with you David
Thanks for this la-onda, SWIR will probably have a nice run up today, with this recommendation and the FED just cutting rates :D
I'll hold SWIR.
JP Morgan says SWIR will be worth $32 twelve months from now, and I say why not? Fundamentals surely deserve that.
Some more good news out Friday before the open, further fueling the 9.5% jump SWIR had:
• Verizon Wireless Introduces The AirCard 595U USB Modem from Sierra Wireless (http://biz.yahoo.com/prnews/070816/nyth042.html?.v=99)
PR Newswire (Thu, Aug 16)
The slide la-onda posted in NVTL's thread can applies equally to SWIR:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39817;image)
53% CAGR in Cellular Wireless modems units between 2006 and 2012.
SWIR has been recovering some ground lately and I expect the stock to close 2007 around $30.
SWIR has been quite strong lately, doing better than NVTL and better than the general market. Cool :)
I guess that JP Morgan upgrade and $32 price target gave people confidence in the stock. Or else it is correcting its relative discount when compared to NVTL.
I'll keep holding SWIR.
SWIR keeps trending higher, leaving several gaps open on the way up, but I don't mind that. The $32 price target given by JP Morgan is acting like a magnet and probably the stock will indeed close 2007 around that level. That's my expectation and I'll continue holding SWIR.
;)
Morgan Joseph & Co update:
Sierra Wireless "buy"
Monday, August 20, 2007 4:55:39 PM ET
Morgan Joseph & Co
NEW YORK, August 20 (newratings.com) - Analyst Kevin Dede of Morgan Joseph maintains his "buy" rating on Sierra Wireless Inc (SWIR.NAS). The target price is set to $30.
In a research note published this morning, the analyst mentions that the company has posted robust results for the June quarter, with sales and EPS significantly ahead of the estimates and the consensus. The sales of Sierra Wireless' devices during the quarter were boosted by the ease-of-use and convenience of the USB form factor, the analyst adds. The company's business going forward is likely to be driven by a continued improvement in the new AirLink acquisition and robust demand for the USB modems in the US, Morgan Joseph says.
holding SWIR & NVTL with strong hands 8)
QuoteIn a research note published this morning, the analyst mentions that the company has posted robust results for the June quarter, with sales and EPS significantly ahead of the estimates and the consensus. The sales of Sierra Wireless' devices during the quarter were boosted by the ease-of-use and convenience of the USB form factor, the analyst adds. The company's business going forward is likely to be driven by a continued improvement in the new AirLink acquisition and robust demand for the USB modems in the US, Morgan Joseph says.
Another upgrade? Sounds great La-onda, thanks for posting.
I wonder if SWIR won't still go down to close the $19.13-$19.76 gap, but that doesn't bother me, for as long as I believe the stock will be at $30 plus by year's end.
The reasons for holding SWIR are basically the same as the ones for holding NVTL, mobile internet will substitute wired and wireless connections over the next few years and both companies will benefit substantially from this global trend. The companies' market is expected to increase at a 53% compound annual growth rate between 2006 and 2012 and there aren't many industries outthere with this kind of growth. Perhaps just the Wide Area File Sharing and Solar energy are in the same league.
I'll hold SWIR for the long term.
just fyi:
SWIR: Short Interest DN 3.2% to 1.4M in Aug 2007
Friday , August 24, 2007 16:21ET
According to new short interest data from NASDAQ, short interest for Sierra Wireless, Incorporated (NasdaqNM: SWIR) DECREASED 3.2% to 1,380,335 shares for the month ended mid-August, 2007.
SYMBOL JULY AUGUST CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
SWIR 1,425,615 1,380,335 -45,280 -3.18% 2
Based on SWIR's 20-day average daily share volume of 1,368,080, it would require approximately 2 day(s) of buying to cover this short interest.
chart:
Just a quick chart update for SWIR:
SWIR has another uncommon technical layout, which is normal taking in consideration past week's extreme market conditions.
We can consider the session of Aug/16th as a key reversal candle so far, an assumption supported by volume and positive reaction over the ema-200. SWIR is now trading near the ema-50, which is a technical reference ($22.55).
Portfolio Instructions:
Hold SWIR
Best regards,
Chart Update:
SWIR remains trading near the EMA-50 inside a tight price range for the past four sessions.
Portfolio Instructions:
Hold SWIR
Regards,
Chart Update:
No developments on this chart, SWIR remains near the EMA-50, apparently consolidating and not following much of the recent market volatility. Yesterday's session had a bit more of volume, maybe the stock is preparing an attempt to break this range.
Portfolio Instructions:
Hold SWIR
Regards,
SWIR has been coming back strongly and I expect the stock to close the year north of $30. Anyway, it is clear now that my "buying SWIR on the dip" recommendation was quite premature and I could have bought the stock after the turn of the short term trend from bearish to bullish and I would have bought considerably lower than I did.
The lesson for the future is: be patient when buying, as much as you are for selling.
I'll keep holding SWIR for the long term.
SWIR didn't do as well as NVTL yesterday, but it held better than the general market. Overall I'm pleased with SWIR and think it will close the year around $30, due to its industry growth.
SWIR turned green on the Main Portfolio. Now I have 7 gainers and 4 losers. I expect SWIR to close 2007 around $30, I'll keep holding the stock.
SWIR reacted negatively to the 50 days SMA because the general market was also deeply in the red on Friday, but I remain a long term bull in the general market and even more so on SWIR, as I see 53% CAGR for its products until 2012.
I'll keep holding SWIR.
SWIR had a 1.2% drop yesterday, no big deal. I think that when the general market turns north again, and I have little doubts that it will, SWIR will outperform the S&P 500 and close 2007 around $30.
Nothing changed on SWIR, and what I wrote on NVTL's thread perfectly applies to SWIR. Analysts estimates for 2008 are too low and when we start approaching the end of 2007 I'm sure they'll have to raise their 2008 estimates meaningfully and that's going to put SWIR above $30 a share by year's end.
I'll keep holding SWIR.
No news out for SWIR over the last few trading days. The stock is still trading just under the 50 days SMA. I expect a bullish breakout sooner rather than later. Perhaps the FED rate cut or statement will be the catalyst for SWIR to start pushing higher again.
You see, there are just three and a half months for 2007 to end and SWIR still needs to rise 31% to be over $30, so let's better start doing it soon :)
I'll continue holding SWIR.
I expect a market rally today and beyond, with the S&P 500 breaking out to new all time highs by year's end. Such a market move will make SWIR's earnings multiple expand and push the stock up to around $30 a share.
I'll continue holding SWIR.
I just want to bring back the Q3 SWIR guidance... ;)
Yahoo board quotation:
I just finished listening to NVTL's presentation that they delivered today, and I found something very interesting. They maintained their $100 mil revenue guidance. Why is this important? They were able to do so while only having two North American majors as customers (Verizon and Sprint). Also they have not had a USB modem channel at Sprint for most of the 3rd qtr. (although this will change soon). This suggests that this sector is really on fire. If they can achieve $100 mil with TWO North American majors, one North American USB channel, and no M2M business; then what will SWIR do with three North American majors, three USB channels (two exclusive - AT&T and temporarily Sprint), and an estimated $9 mil contributed from M2M? I think that we may be in for a blowout qtr. If we can just get these new HSUPA modems shipped, we may just knock the doors off of the hinges.
long and strong holding SWIR
best regards from Singapore >:D
QuoteI just want to bring back the Q3 SWIR guidance... ;)
Yahoo board quotation:
I just finished listening to NVTL's presentation that they delivered today, and I found something very interesting. They maintained their $100 mil revenue guidance. Why is this important? They were able to do so while only having two North American majors as customers (Verizon and Sprint). Also they have not had a USB modem channel at Sprint for most of the 3rd qtr. (although this will change soon). This suggests that this sector is really on fire. If they can achieve $100 mil with TWO North American majors, one North American USB channel, and no M2M business; then what will SWIR do with three North American majors, three USB channels (two exclusive - AT&T and temporarily Sprint), and an estimated $9 mil contributed from M2M? I think that we may be in for a blowout qtr. If we can just get these new HSUPA modems shipped, we may just knock the doors off of the hinges.
long and strong holding SWIR
best regards from Singapore >:D
Great post la-onda, as always :)
The market agrees with this poster's views, since SWIR finally closed above the 50 days SMA.
I'm not sure about the two for NVTL, three for SWIR though. Since I'm not living in the USA I don't know the mobile operators very well and which uses which, Novatel or Sierra Wireless. but I guess he's right, I check this information for the next update.
As for NVTL's weakness on Q3 due to some Sprint delay, I remember the stock was downgraded due to that issue, but since it is just a temporary thing, not affecting the long term outlook, I remained confident on the stock and I still am today.
SWIR is ready to push towards $30 a share, with the general market's help, but more importantly, because its industry is really on fire and it will remain that way for years to come.
There goes our hope for a continued push to the upside (at least for the short term). Down nearly $1 in AH.
QuoteSAN FRANCISCO (MarketWatch) -- Sierra Wireless Inc. said Wednesday evening it has entered into a bought-deal agreement with a syndicate of underwriters led by CIBC World Markets to sell 3.5 million shares in the U.S. and Canada for $22.40 each. The sale will raise $78.4 million, and net proceeds will be used for general corporate purposes, working capital and potential future acquisitions. The Canada-based maker of mobile broadband network products and software said the offering is expected to close on or about Oct. 2.
Quote from: Kublakhan on September 19, 2007, 08:47:31 PM
There goes our hope for a continued push to the upside (at least for the short term). Down nearly $1 in AH.
QuoteSAN FRANCISCO (MarketWatch) -- Sierra Wireless Inc. said Wednesday evening it has entered into a bought-deal agreement with a syndicate of underwriters led by CIBC World Markets to sell 3.5 million shares in the U.S. and Canada for $22.40 each. The sale will raise $78.4 million, and net proceeds will be used for general corporate purposes, working capital and potential future acquisitions. The Canada-based maker of mobile broadband network products and software said the offering is expected to close on or about Oct. 2.
Nahhh...Only short term down side...maybe when I get some funds I can buy. SWIR has no debt..."The sale will raise $78.4 million, and net proceeds will be used for general corporate purposes, working capital and potential future acquisitions"...this can only be a good thing in the weeks/months to come.
QuoteThere goes our hope for a continued push to the upside (at least for the short term). Down nearly $1 in AH.
Quote
SAN FRANCISCO (MarketWatch) -- Sierra Wireless Inc. said Wednesday evening it has entered into a bought-deal agreement with a syndicate of underwriters led by CIBC World Markets to sell 3.5 million shares in the U.S. and Canada for $22.40 each. The sale will raise $78.4 million, and net proceeds will be used for general corporate purposes, working capital and potential future acquisitions. The Canada-based maker of mobile broadband network products and software said the offering is expected to close on or about Oct. 2.
based on inmediate short term it looks like its gonna go down.
RSI2 and fast stochastics say its overbought.
Quotebased on inmediate short term it looks like its gonna go down.
RSI2 and fast stochastics say its overbought.
Hi pinol, it will go down (perhaps not for more than today's open), but it's not because those technical indicators say so. A stock can be overbought for weeks, months, even years ... depending on the time frame used. The most important issue in technical analysis is the trend.
The news out was this:
• Sierra Wireless to Sell 3.5M Shares (http://biz.yahoo.com/ap/070919/sierra_wireless_financing.html?.v=1)
AP (Wed 5:53pm)
Prior to this SWIR had 27.34 M shares outstanding, so it's about 12.8% dilution. We'll see what they're going to do with the money, if there's an acquisition or not.
As kslifka wrote, SWIR has no short or long term debt, and it has $89 M in cash, so it doesn't need the money from a short term liquidity needs perspective. On my valuation model I had just 1% dilution, so I'll need to adjust that for the next update and see what the changes are. Hopefully the money will be used to change other variables, like net profit margin for example.
I'll keep holding SWIR, despite the short term setback.
From Briefing.com:
Lehman says SWIR prepping for acquisition; move is positive
20-Sep-07
SWIR Sierra Wireless: Prepping for acquisitions - Lehman (23.71 ) -Update-
Lehman notes SWIR's capital raise of $78 mln suggests mgmt is prepping for potential acquisitions in order to broaden its addressable mkt and/or further diversify. They consider both a strategic positive, though dependent on the target. Firm believes SWIR is evaluating several potential candidates to either diversify its biz (i.e. M2M) or move upstream in core opps (i.e. software), similar in size and scope to its recent AirLink acquisition. Firm does not, however, consider a deal imminent, though one may occur in the next 12-18 months.
&
Bought Deal Sinks Sierra Wireless; Acquisitions Expected
Dow Jones Newswires - September 20, 2007 3:23 PM ET
By Stuart Weinberg
TORONTO (Dow Jones)--Shares of Sierra Wireless Inc. (SWIR) are down 4.6% as the Street rejigged its earnings forecasts to factor in dilution from Wednesday's bought-deal announcement. As reported, Sierra said late Wednesday it plans to raise US$78.4 million through the sale of 3.5 million shares at US$22.40 a share. The deal includes an overallotment option for an additional 525,000 shares, which could bring Sierra an additional US$11.8 million. CIBC World Markets is leading the underwriting syndicate, which also includes Piper Jaffray and RBC Capital Markets. The move was a surprise because Sierra doesn't need the cash, analysts said. The Vancouver company ended its second quarter on June 30 with US$90.1 million in cash and short-term investments. In its press release Wednesday announcing the deal, Sierra included the standard boilerplate saying that net proceeds from the offering will be used for general corporate purposes, working capital and potential future acquisitions.
Dev Bhangui, analyst at Haywood Securities, had little doubt what the funds will be used for. "This is specifically meant for acquisitions," he said. Bhangui said he believes future Sierra acquisitions will be similar to, or slightly larger in size than, the firm's acquisition of AirLink Communications in March. Sierra paid US$11 million for AirLink and issued 1.3 million shares to pay for the transaction. The purchase moved Sierra into the machine-to-machine, or M2M, market, a high-margin business that helped Sierra diversify away from its core PC Card and embedded-module businesses. M2M refers to technology that allows communication between machines. Scotia Capital's Gus Papageorgiou said in a note Thursday that he believes future Sierra acquisitions could also come in the M2M sector, or in the embedded-module space.
long and strong
Oliver
Thanks for those analyst's reports La-onda, they'll probably help SWIR recover from yesterday's "not so bad" 4.5% decline.
If the cash from the private placement is used for accretive acquisitions then it was worth it. I have just 8% net profit margin in my valuation model estimates, could it be more? I hope so, 8% is still kind of low for a high tech company.
I'll keep holding SWIR.
So far I've owned SWIR just as an extension of NVTL, since both companies products are similar, but as I read the following I want to learn more about this machine-to-machine communications market:
QuoteThe purchase moved Sierra into the machine-to-machine, or M2M, market, a high-margin business that helped Sierra diversify away from its core PC Card and embedded-module businesses. M2M refers to technology that allows communication between machines.
I'll study that for the next update.
SWIR went down 0.5% on Friday, still reacting to the private placement announced on Thursday. I think this is just a small setback and the stock will close the year around $30. Anyway, I still need to correct my valuation model, I'll also do that tomorrow.
I'll keep holding SWIR.
I have forgotten this one :D
Sierra Wireless "overweight," estimates reduced
Thursday, September 20, 2007 12:35:37 PM ET
Lehman Brothers
NEW YORK, September 20 (newratings.com) - Analyst Jeff Kvaal of Lehman Brothers maintains his "overweight" rating on Sierra Wireless Inc (SWIR.NAS), while reducing his estimates for the company. The target price is set to $32.
In a research note published this morning, the analyst mentions that the capital increase of $78 million by Sierra Wireless indicates that it is making preparations for possible acquisitions in order to diversify its business and widen its market. The timing of the capital raise indicates that Sierra Wireless' 3Q prospects are bright, the analyst says. The EPS estimates for 2007 and 2008 have been reduced from $1.06 to $1.05 and from $1.40 to $1.32, respectively, to reflect the approximately 5%-7% dilution.
cheers from SGP
O.
Telstra launches Sierra Wireless HSPA products in Australia
Sep 24, 2007 21:00:00 (ET)
VANCOUVER and SYDNEY, Australia, Sept 25, 2007 /PRNewswire-FirstCall via COMTEX/ -- Sierra Wireless (NASDAQ: SWIR - TSX: SW) and Telstra today announced that the Sierra Wireless AirCard(R, Trade ) 880U USB modem and the AirCard 880E ExpressCard are now commercially available in Australia to provide high-speed mobile access to Telstra's Next G(TM) HSPA network.
With the Sierra Wireless AirCard 880U USB modem and AirCard 880E ExpressCard operating on Telstra's Next G HSPA network, customers will be able to send email attachments, upload information, and transmit data at peak network speeds up to 1.9 megabits per second (Mbps) - significantly faster than was possible with earlier network technologies. This improvement in uplink speed, combined with peak network downlink speeds of up to 7.2 Mbps, allows for new applications such as web conferencing and live video, and significantly improves the user experience for customers working over a virtual private network.
Telstra will market the Sierra Wireless AirCard 880E as the Telstra Turbo 7 Series Express Card and BigPond Wireless Broadband 7.2 Mobile Card. The Sierra Wireless AirCard 880U will be marketed as the Telstra Turbo 7 Series Modem and BigPond Wireless Broadband USB Mobile Card.
Telstra's Next G(TM) network upgrade will also benefit customers operating an AirCard 875 PC card, which can be upgraded to take advantage of the increased downlink speed with a simple firmware update.
"The move to HSPA technology offers great benefits for mobile data customers, who will find that the significantly improved upload speed available makes sending large email attachments, for example, to be much faster," said Dan Schieler, senior vice president, Worldwide Sales for Sierra Wireless. "Telstra has shown extraordinary market leadership in quickly transitioning to new wireless technology, and we are pleased to support its deployment of HSPA and to continue to improve the mobile broadband experience for customers in Australia."
Holly Kramer, Group Managing Director, Telstra Product Management said, "Telstra is pleased to be partnering with Sierra Wireless to launch the first 7.2 data cards in the Australian market, bringing the benefits of the fastest national mobile broadband network to 98.8 percent of the Australian population."
The AirCard 880U USB modem and the AirCard 880E ExpressCard are fully compatible with HSPA, UMTS, EDGE, GPRS, and GSM network technologies on all frequencies currently used worldwide. To ensure there is always enough power support to handle peak or fringe area transmission requirements without compromising performance, the AirCard 880U USB modem includes an internal battery that supplements the power from the USB port when extra power is required.
I made some changes at my valuation model from SWIR, considering the dilution coming from the recent private placement and expecting management to make an accretive to earnings acquisition.
I've increased the dilution factor to 4% a year from 1% a year, but I've also raised my revenue CAGR estimate from 70% a year to 75% and my net profit margin estimate from 8% to 9%. The final result was that the optimal selling price rose from about $51 to about $54.
These estimates also consider that management takes actions (like the private placement) to increase shareholder's value over the long term, not to reduce it.
There was a not so relevant (for the share price) press release out from the company today (thanks for posting Garoh):
• Telstra launches Sierra Wireless HSPA products in Australia (http://biz.yahoo.com/prnews/070924/to220.html?.v=55)
PR Newswire (Mon 9:00pm)
One thing worth mentioning is the following:
«Holly Kramer, Group Managing Director, Telstra Product Management said, "Telstra is pleased to be partnering with Sierra Wireless to launch the first 7.2 data cards in the Australian market, bringing the benefits of the fastest national mobile broadband network to 98.8 percent of the Australian population."»
Today it is 7.2, next 8.2, then 9.2, whatever the numbers are, there's a constant need for upgrading the equipment, which means today's consumers will probably consume more of the company's products two or three years from now. It's not something you buy once, you'll keep on buying, just like computers and mobile phones keep improving. This is why NVTL and SWIR are businesses which will be here over the long term.
As for yesterday's decline, it wasn't company specific, it was because of the general market weakness, in the same way we've talked about in NVTL's thread, the multiple expansion/contraction phenomenon. However, after today's possible weak open, I expect a very strong rally to new highs in the S&P 500, and that should also drive SWIR up (more than the S&P 500).
I'll keep holding SWIR for the long term.
buenos dias!
good morning!
David I agree I think it looks like its definately a good day to buy at least according to the chart.
p.s. I am not a technitian I just learned this thing about rsi2 and fast stochastics in this forum.
fyi DAvid:
SWIR: Short Interest UP 60.2% to 2.2M in Sep 2007
Tuesday , September 25, 2007 16:20ET
According to new short interest data from NASDAQ, short interest for Sierra Wireless, Incorporated (NasdaqNM: SWIR) INCREASED 60.2% to 2,210,754 shares for the month ended mid-September, 2007.
SYMBOL AUGUST SEPTEMBER CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
SWIR 1,380,335 2,210,754 +830,419 +60.16% 6
Based on SWIR's 20-day average daily share volume of 409,815, it would require approximately 6 day(s) of buying to cover this short interest.
Thanks for the info la-onda. SWIR closed above the open yesterday, on volume above average, so I guess smart investors are buying on this dip. I'll hold SWIR.
SWIR still didn't say why it wanted those $78 M, but people are speculating it's for acquisition, since the company didn't need the money for working capital purposes. The stock seems to have found a floor. I'll keep holding SWIR.
Swir today's problem child? Nvtl also for that matter.
Quote from: soxguy on September 27, 2007, 10:38:50 AM
Swir today's problem child? Nvtl also for that matter.
Yes, they were both weak yesterday, I don't know why. I guess it will take analysts looking at 2008 numbers, or the company providing guidance to change things over the short term.
Anyway, I'm a believer in that study showing 53% CAGR between now and 2012 in these companies' industry, so I'll continue holding SWIR for the long term.
swir and nvtl weak again on no news. if and when it comes,i hope theycan recover.
Quote from: soxguy on September 28, 2007, 09:49:50 AM
swir and nvtl weak again on no news. if and when it comes,i hope theycan recover.
Yeah, it has been a though market for these two lately. SWIR's reason seems to be the private placement they made ... investors didn't like that. The sooner they say what was the money for, the better. I'm pretty much sure they'll announce an acquisition sooner or later, because the balance sheet didn't show any short term liquidity needs.
But the big deal will be when/if they raise 2008 guidance, because I don't believe there's going to be just 20% growth, after a 258% revenue growth in 2007 from the 2006 level. I just don't.
I'll hold SWIR for the long term.
Stupid SWIR is really nose-diving, it makes me sick.
But if I calm down a bit and think about what I've just heard at the Jefferies conference from NVTL, saying "all product categories are growing very rapidly" and watch how the volume is increasing as the price goes down, meaning the lower prices are attracting new buyers, I see this weakness as a buying opportunity, which I would take if I haven't already bought.
Then if I start thinking about people preferring mobile internet as their first choice for connectivity and the 53% CAGR these products will probably have between now and 2012, then I enter a sea of calmness, without a doubt in my mind that the correct thing to do is to hold SWIR with strong hands for the long term. I'll do the correct thing.
David it looks like it has reach the end , probably 19.80 to 20.40 is a one time chance for those who want to buy it at these low prices ;)
I won't be nice below 18.90 ...
I'm buying today
AP
Sierra Wireless Completes Stock Offer
Tuesday October 2, 9:14 am ET
Sierra Wireless Completes Stock Offer of 3.8 Million Shares for $22.40 Per Share
NEW YORK (AP) -- Canadian wireless technology company Sierra Wireless Inc. said Tuesday it completed a stock offering of 3.8 million shares at a price of $22.40 per share.
The gross proceeds of the offering were about $85.1 million. The cash raised from the deal will be used for general corporate purposes, working capital and potential future acquisitions.
The offering included 300,000 shares to cover overallotments.
Shares of Sierra Wireless closed Monday at $20.39.
Reason for the boost today?
QuoteReason for the boost today?
I think it might be the following:
«Under the offering, which included 300,000 shares issuable upon the exercise by the underwriters of the over-allotment option, Sierra Wireless sold 3,800,000 common shares
from treasury.»
I'll investigate this issue better for the daily update, I don't have time now, have to go pick up my kids from school.
See you :)
I'm going to have to write SWIR's investor relations because I can't find any shares in treasury for them to sell from treasury:
«Under the offering, which included 300,000 shares issuable upon the exercise by the underwriters of the over-allotment option, Sierra Wireless sold 3,800,000 common shares from treasury.»
Treasury Stock Definition:
«Stock reacquired by a corporation to be retired or resold to the public. Treasury stock is issued but not outstanding, and is not taken into consideration when calculating earnings per share or dividends, or for voting purposes.»
Anyway, this doesn't change much of the long term outlook that I have for SWIR, which calls for more than 50% revenue CAGR over the next 5 years, so ... I'll keep holding SWIR for the long term.
I wrote SWIR's CFO about the "from treasury" issue, I'm still waiting for a reply.
Anyway, with NVTL doing so well, there's no way SWIR can stay down here, since fundamentals are about the same.
I'll keep holding SWIR.
SWIR is cheaper than NVTL, because 2008 EPS estimates call for $1.21 EPS for SWIR and $1.2 for NVTL. This means SWIR is trading at $21.27/$1.21 = 17.6 times earnings, while NVTL is trading at $25.08/$1.20 = 20.9 times earnings.
But I think they're both even cheaper, because those 2008 estimates, calling for something like 12% to 20% growth, are way too conservative, since both companies have studies which say their market will grow by more than 50% next year. The way I see the reality in the consumers behavior I'm more of a believer in 50% plus than less than 20% ...
I'll continue holding SWIR for the long term.
I expect SWIR to follow NVTL's footprints and I'll continue holding it.
I don't have a valid explanation to why NVTL goes up and SWIR goes down. Maybe it's because investors think NVTL is stealing market share from SWIR ... but I don't think that should have much of an effect on SWIR, because the industry itself is expected to grow at a 53% CAGR over the next five years. With the market growing at this speed, it doesn't matter much if you win or lose 5% of market share.
Or else the market knows something, like for example, it knows SWIR is about to lose one of its major clients to NVTL. This could be the cause for the weakness, but this is just futile speculation.
As far as I'm concerned, and until we get new fundamental information, I'll consider SWIR's relative weakness as "short term technical noise" and I'll continue holding the stock for the long term.
SWIR's short term technical noise continues to defy logic, but since it's noise it's not supposed to have a logic. I remain confident that over the long term the fundamental trends of the business will reign supreme and those are without a doubt strongly positive.
I'll continue holding SWIR for the long term.
Perhaps SWIR will have to touch the 200 days SMA before moving up, like it happened in mid-August. Anyway, I believe SWIR will be around $30 by the end of the year and I'll continue holding the stock.
At last, a little bit of positive action from SWIR. It's funny how analysts expect $1.21 EPS for SWIR in 2008 and $1.2 EPS for NVTL, and SWIR closed at $20.7 and NVTL at $26.42.
With about the same EPS projections (which I believe are very low in both cases), both stocks should be trading at about the same price ... but SWIR needs to rise 27.6% to catch up with NVTL.
Since I don't see a valid reason for this discount, I believe SWIR will indeed rise and catch up with NVTL. Then it will rise some more because 2008 estimates are too low.
I'll continue holding SWIR for the long term.
Ever hear that saying: "Almost too good to be true?"
This stock is whispering that to me.
I am breaking all kinds of rules to own more shares of this growth stock..
The chart looks like a train wreck, but today's volume is encouraging because MAYBE there has finally been some capitulation...
SWIR now appears to be a takeover candidate at the current price.
Does it not?
Do you guys ever use stop limits on stocks...
Maybe the 200 day MA?
I know what you are going to answer but I thought I would ask anyway...
Anyone else holding SWIR that wants to comment?
I have some comments :)
It will probably close the gap , and I'll stop losses if it close below $18.90 ..
that's it
Let's have a little additional patience with this one.
If you look at those descending and upward trends, it seems it still has a chance.
Now of course if you only look at the following chart and depending on your entry
you are right to be worried. But even in this chart there is still some hope.
STO is about to rebound and even though the 20MA is crossing down the 50 MA,
both are still over the 9 EMA.
Therefore we have the ascending weekly line is slightly broken and also the 200 EMA close
that might act as support.
Tomorrow is a key day for this one.
Thanks guys!
Anyone else wanna chat about SWIR?
I am putting the "Zurich Axioms" to the ultimate test with SWIR.
I know you all must think I am a friggin idiot.
The Risk is getting very small at these prices.
The Reward is just phenomenal!
But the real question is:
Doesn't SWIR appear to be a takeover candidate at the current price?
With the Revenues it generates, Cash in the bank and Zero debt???
Cisco has to be eyeing this sucker...Has to be.. Or maybe Google even?
QuoteThe chart looks like a train wreck, but today's volume is encouraging because MAYBE there has finally been some capitulation...
Consider GIGM's chart in early August when the stock broke down to $9. Fundamentals appeared to be awesome, but the chart didn't agree at all. In the end, fundamentals won. I think the same thing will end up happening with SWIR.
QuoteTomorrow is a key day for this one.
I used to think this way too jorgegr, but after seeing what I've seen over the last 12 months, I believe one day of market action doesn't tell me anything about the future of a stock price.
QuoteBut the real question is:
Doesn't SWIR appear to be a takeover candidate at the current price?
With the Revenues it generates, Cash in the bank and Zero debt???
Cisco has to be eyeing this sucker...Has to be.. Or maybe Google even?
Maybe, but I believe that hope/expectation can't be the reason for holding SWIR. I think takeovers are mostly unpredictable, unless one has inside information, which of course we don't. You buy undervalued stocks and they will rise because they're undervalued or because there's a takeover and that's it. It is good enough to know what is undervalued and what isn't, to know the actual reason why they'll move up or by what amount ... it shouldn't be done, even though sometimes I do that too.
Perhaps Garoh is right and SWIR just has to close that gap at $19.13 or touch the 200 days SMA at $19.36 again. It may even break these "key" support levels, I don't bother about that (I know Garoh will use stops, I don't even consider them).
What I see is a stock currently trading at 16 times next year projections of $1.21 EPS, which I believe are way too conservative. I believe that, from what I see in the real economic world and the "go mobile" trend everywhere, that SWIR will probably achieve $1.5 EPS in 2008, up from about $1 in 2007. This tells me SWIR is trading at 13 times forward earnings while I expect these to keep growing at a 50% CAGR over the next five years, which is an extremely attractive valuation.
I'll hold SWIR until the market recognizes my view of the fundamentals or until I'm proven wrong by the incoming data.
This is a good stock. I am on the sidelines just waiting for the down trend to settle down, before I buy. I cannot explain the downswing. Double bottom at $17.50?
Man, this is rediculous!
The hit today was because of "ERIC" :-(
What is "ERIC"?
I think he means Ericcson...
Yeah, Ericcson.. Sorry about that..
Hey Garoh, are you closing your SWIR trade?
Quote from: wxmang on October 16, 2007, 02:28:44 PM
Yeah, Ericcson.. Sorry about that..
Hey Garoh, are you closing your SWIR trade?
Hi wxmang
As I said closing below 18.90 is too bad , but there's still some hope on weekly we can wait to see if it doesn't close below 17.70 ...
But in general I see a too bad chart on both daily and weekly ..
I'm not recommanding anyone to sell ... I'll include a chart to show why I think it's going down , I might be wrong anyway ...
Again this could be wrong , just my thoughts :)
Thanks Garoh for replying but I have to disagree with that "target"
Good God Man!
That is absurd!
There are three Institutions that paid for SWIR's shares at $22.40!!!
Listen to me on this:
I was just comparing all of 2006 Earnings on SWIR to all of 2007 earnings.
In all of 2006, SWIR earned $0.42 and the stock price was around $14 around by Christmas 2006.
Now, SWIR is expected to earn $1.01+ for all of 2007.
If we use a simple ratio like this:
$14/$0.42 = X/$1.01
X=$33.66 (X=What SWIR should be at by Christmas 2007.)
This a very conservative target too!
In my opinion the analysts are right on the mark here with a $32 price target!
Anyone care to comment?
Thanks!
From the Yahoo Board:
"In Lehman's morning summary yesterday, they had a $32 price target on SWIR with $1.06 EPS for 07 and $1.31 for 08.
They also say, "Our checks suggest solid core biz led by demand for USB modems at Verizon and ATT. Sprint may provide upside." And that they also expect a solid market and HSUPA intros to drive results above consensus. They finish with "view valuation compelling.""
Does this sound like a $18 stock?
David,
Does this at all worry you owning SWIR especially through earnings?:
"Ericsson Tumbles After Cuts to Forecasts"
"Some analysts said market-leader Ericsson's difficulties in forecasting its business and the order delays may point to broader weakness in the industry. Ericsson's weakness "amplifies the problems in the sector," said Thomas Langer, an analyst at West LB in Düsseldorf, Germany."
http://online.wsj.com/article/SB119251511737860388.html?mod=yahoo_hs
It appears that Ericsson is a competitor to SWIR:
http://www.wireless.att.com/businesscenter/solutions/wireless-laptop/laptop-connect-devices.jsp
Hi wxmang, thanks for your posts :)
I wonder if instead of holding SWIR's shares, you're holding call options instead? Or if you have too much weight of your portfolio allocated to SWIR?
I see you quite anxious about the short term outlook for SWIR. You're under pressure here.
You know that my hands are strong not just because I study and trust the fundamentals of the stocks I own, but also because of the money management rules I always obey and have kept me out of trouble, mainly:
1) Never average up or down on any investment;
2) Always buy a fixed portion of capital in each different holding, in the Main's case, 6.66%, which means I always need 15 different holdings to be full invested, diversifying risk.
I wish you get away with your overexposure to SWIR, but remember this lesson for the future anyway. It is easy to know what needs to be done in order to have appropriate risk in a stock's portfolio, but actually doing it is a whole different and much harder task.
Anyway, I enjoy your posts and interest on SWIR :)
As for ERIC, I think it is different from SWIR. I don't see it as a major competitor to SWIR. Perhaps it has some products in a similar area, but not quite the same thing as SWIR's products (http://www.sierrawireless.com/product/).
The stock has broken down below the 200 days SMA and the gap level at $19.13. Technically it is very hard, almost impossible, to defend it. Fundamentally you said it all, the stock is growing a lot and it is trading at a low earnings multiple.
I believe anyone looking at what is happening in the real world knows SWIR's products are in high demand and that will grow even more. What I've wrote today in NVTL's thread equally applies to SWIR, the only difference being that SWIR is cheaper.
Because I currently have just 4.6% of capital invested in SWIR I'm able to go through the short term storm and keep focusing and holding the stock for the long term. But I understand that some of you folks have more exposure and that always brings more anxiety.
The stock will open higher today, after two days of strong volume. I hope the bottom was made and SWIR trends higher from here. Fundamentally, it should.
"I wonder if instead of holding SWIR's shares, you're holding call options instead? Or if you have too much weight of your portfolio allocated to SWIR?"
Damn straight I do!
The risk here is 10% down if they come in-line with earnings.
The upside is 50%+ due to my ratio in the previous post...
This article came out today that will solidify my Risk Taking:
"Explaining Sierra's selloff"
"The recent selloff in Sierra Wireless Inc. represents a buying opportunity as the "underlying fundamentals [are] strong and the valuation compelling," suggests Scotia Capital's Gus Papageorgiou.
He explains that a trading relationship between Sierra and rival Novatel Wireless Inc. recently broke down because of rumours that Sprint is preparing to eliminate Sierra from its retail channel, a Novatel upgrade and overhang from a Sierra equity issue.
"None of these reasons really threatens the core investment hypothesis in Sierra, nor diminishes ... the company's competitive position," he writes.
While LM Ericsson this week warned of a less robust roll-out of third generation (3G) wireless networks in the U.S., "many investors may be concerned that this will impact Sierra," Mr. Papageorgiou reasons.
"Certainly it will have some impact, but ... we believe AT&T will continue to aggressively market Sierra's products, because these data cards are the only real 3G application available and the carriers need them to help capitalize on their 3G investments," he writes.
He rates Sierra "outperform," with a $31 price target. The stock has gained 1 per cent to $18.30 on the TSX Wednesday afternoon."
http://www.theglobeandmail.com/servlet/story/RTGAM.20071017.WBmarkets20071017132200/WBStory/WBmarkets
Do you guys realize how many commercials I see all day long for Sierra's products?
AT&T is pushing it harder than any product I have seen on the "boob tube" this year!
And look at the diversity of Sierra's product's:
http://www.wireless.att.com/businesscenter/solutions/wireless-laptop/laptop-connect-devices.jsp
5 To 1 on Novatel!
"It is easy to know what needs to be done in order to have appropriate risk in a stock's portfolio, but actually doing it is a whole different and much harder task."
SO TRUE!!! Thanks David :-)
Thanks for the valuable information wxmang :)
Those are plausible reasons to explain SWIR's decline, and I also agree with the conclusion that bears are losing sight of SWIR's long term fundamental story, which is quite attractive.
The market responded very well yesterday, with an 8.5% advance. I guess the bottom was made and SWIR is now free to continue its long term trend, which is up, reflecting the fundamental improvement and the cheap valuation.
I'll continue holding SWIR for the long term.
I just received my AT&T Entertainment & Communication Fall Catalog...
You know I have been pounding the table about all the AT&T Commercials with the Wireless Laptop Connect Card?
"Found It"
"In a Pond"
"In A tree"
I am going nuts with these commercials!#%$^
Ok...
So I flip through the catalog and there IS NOT one Novatel Wireless or Ericsson ADVERTISEMENT!
The only company I see is Sierra Wireless!
http://www.2and2.net/files/47183f00664b5.jpg
I truly believe SWIR is going to blow the doors off of Q3 and Q4!
AT&T has spent sooooo much money pushing Sierra's Products..
Novatel is no where to be found in this Catalog folks!
I just can't get out of my mind how many times I saw Garmin's commercial and Costo's ads with Garmin in them....
After that Garmin Doubled in stock price within a few months...
If you believe in "The Secret" you have to believe in Sierra Wireless :-)
Good Night and High Fives to those Who Still Hold This Winner!
Quote from: wxmang on October 19, 2007, 01:37:02 AM
I just received my AT&T Entertainment & Communication Fall Catalog...
You know I have been pounding the table about all the AT&T Commercials with the Wireless Laptop Connect Card?
"Found It"
"In a Pond"
"In A tree"
I am going nuts with these commercials!#%$^
Ok...
So I flip through the catalog and there IS NOT one Novatel Wireless or Ericsson ADVERTISEMENT!
The only company I see is Sierra Wireless!
http://www.2and2.net/files/47183f00664b5.jpg
I truly believe SWIR is going to blow the doors off of Q3 and Q4!
AT&T has spent sooooo much money pushing Sierra's Products..
Novatel is no where to be found in this Catalog folks!
I just can't get out of my mind how many times I saw Garmin's commercial and Costo's ads with Garmin in them....
After that Garmin Doubled in stock price within a few months...
If you believe in "The Secret" you have to believe in Sierra Wireless :-)
Good Night and High Fives to those Who Still Hold This Winner!
Great post wxmang :)
But I guess the reason why you don't see any NVTL products in that catalog is because AT&T isn't a NVTL costumer (http://www.novatelwireless.com/partners/operators/northamerica.html).
But I agree with you, both NVTL and SWIR benefit from the carriers' advertising efforts to gain subscribers for their mobile internet connection services. They benefit, but don't spend a dollar in advertising.
SWIR still has some work to do to get bullish from a technical perspective, but there's no doubt fundamentals are attractive, and over the long term fundamentals prevail (they can also change direction, but I don't see that happening).
I'll continue holding SWIR with strong hands.
After 88% growth in 2007, analysts expect just 19.5% growth in 2008 for SWIR:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41204;image)
I think that with the mobile internet connection gaining momentum in the world, 2008 growth will be as high or even higher than 2007 growth rate.
I believe analysts will start pushing up their 2008 estimates when we get to the end of the 2007, and that should fuel a rise of SWIR towards and beyond $30 a share.
The move from fixed/wireless internet connection to mobile will happen with or without strong economic growth, it is a matter of consumers getting a better service for the same or even less cost, so it seems to me like an inevitability.
I'll continue holding SWIR for the long term.
*DJ Sierra Wireless Raised To Strong Buy From Outperform By R. James >SWIR
.
(MORE TO FOLLOW) Dow Jones Newswires
October 22, 2007 07:33 ET (11:33 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 07 33 AM EDT 10-22-07
Ahead of the Bell: Sierra Wireless
Monday October 22, 9:10 am ET
Sierra Wireless Upgraded Ahead of 3rd-Quarter Earnings Analyst Expects to Be 'Strong'
NEW YORK (AP) -- An analyst upgraded Sierra Wireless Inc. on Monday, ahead of the company's third-quarter earnings report that is expected to be "strong" when announced later in the week.
Raymond James analyst Sera Kim upgraded Sierra to "Strong Buy" from "Sector Perform" and maintained his $30.75 price target.
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"We recommend investors buy shares of Sierra Wireless ahead of the quarter," Kim said in a client note. "We believe that third-quarter results will be solid and that fourth-quarter guidance will be at least in line with expectations."
The company makes wireless modem cards for laptops and other devices, among other products, and some of its biggest clients include heavyweights AT&T Inc. and Sprint Nextel Corp. Sierra Wireless' 595U USB modem is Sprint's top-selling laptop card, he said.
The company's stock is down 13 percent over the past month, which Kim called an "excellent entry point." Kim said Sierra's strong stock performance compared with competitors' and expected growth in the cellular industry also influenced the upgrade.
The Richmond, British Columbia, company has previously forecast third-quarter earnings of 27 cents per share on revenue of $109 million. Kim also expects earnings of 27 cents per share, and revenue of $109.5 million.
Shares of Sierra Wireless, which is scheduled to report results after the closing bell on Thursday, Oct. 25, fell Friday to $19.47. The shares added 32 cents to $19.79 in premarket trading.
That's the news SWIR needed to break the short term down trend. I'm now in at $20.67.
Thanks for the tip David!
fyi:
Timing of Sierra Wireless Third Quarter Financial Results
Monday , October 22, 2007 09:00ET
VANCOUVER, Oct. 22 /PRNewswire-FirstCall/ - Sierra Wireless (NASDAQ: SWIR - TSX: SW) will release its financial results for the quarter ended September 30, 2007 on Thursday, October 25, 2007. Sierra Wireless President and CEO, Jason Cohenour, and CFO, David McLennan, will hold a conference call with analysts and investors to discuss the results at 5:30 PM Eastern time the same day.
Conference Call and Webcast:
----------------------------
Date and Time: Thursday, October 25 at 5:30 PM Eastern time
Conference call number: 1-800-733-7560 or 1-416-644-3414.
Webcast (listen only): To access the web broadcast of the call, please enter www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1973620. Microsoft Windows Media Player software is required. To download the software, go to: http://www.microsoft.com/windows/windowsmedia/download.
To participate in this conference call or webcast, please connect approximately five minutes prior to the commencement of the call.
Instant Replay:
---------------
For those unable to participate in the live call, an instant replay will be available.
- Dial-in: Dial 1-877-289-8525 or 1-416-640-1917 and enter passcode
21243588 followed by the number sign to access the instant replay.
(Available for 7 business days following the call.)
- Webcast: The Web broadcast will remain available at the above link
for 90 days following the call.
Estimations:
http://finance.yahoo.com/q/ae?s=SWIR
Chart:
So we've had a "strong buy" recommendation:
SWIR: Raymond James Ups to Strong Buy from Outperform (http://www.knobias.com/story.htm?eid=3.1.130bde0025c7e2396f3e3160c300292318d6e5299e4bae579544d777e63fff1c)
«"We recommend investors buy shares of Sierra Wireless ahead of the quarter," Kim said in a client note. "We believe that third-quarter results will be solid and that fourth-quarter guidance will be at least in line with expectations."»
I think the real upside will happen when analysts start upgrading their 2008 estimates, which still call for $1.20 EPS, or just 18.8% growth over the $1.01 expected for 2007 (http://finance.yahoo.com/q/ae?s=SWIR).
Q3 earnings will be announced tomorrow after the close:
• Media Advisory - Timing of Sierra Wireless Third Quarter Financial Results (http://biz.yahoo.com/prnews/071022/to391.html?.v=29)
PR Newswire (Mon, Oct 22)
Even though I know investors will be focused on the "beat or miss" game, and if t beats, by how much, but I'll be more concerned on what the company says about the future, mainly management's expectations for 2008. I want to get a feel that they expect much stronger than the 19% or so growth analysts expect.
I personally have 75% revenue CAGR in my valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=SWIR&portfolio=main), so you see that I'm a lot more optimistic than most analysts. If analysts are close to being right, I'll probably have to sell SWIR. If on the other hand I'm the one who's right, the stock will go up 160%.
I'll continue holding SWIR.
Maybe the reason swir and nvtl are down?
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Qualcomm Introduces Gobi Global Mobile Internet & GPS Solution for Notebook Computers
Available Today, Gobi Enables High-Speed Connectivity to All 3G & Legacy 2G Networks Worldwide with a Single Embedded Device
SAN FRANCISCO — October 23, 2007 — Qualcomm Incorporated (Nasdaq: QCOM), a leading developer and innovator of advanced wireless technologies and data solutions, today introduced Gobi™ global mobile Internet, an embedded solution for notebook computers. Notebooks featuring the multi-mode Gobi solution can take advantage of the high-speed mobile Internet services offered by leading network operators in virtually all parts of the world, as well as GPS. The Gobi solution is meeting the demand from leading notebook manufacturers for worldwide connectivity capabilities beyond Wi-Fi and is being certified to operate on CDMA2000® EV-DO and UMTS HSPA networks worldwide. The Gobi solution is available today, and enterprise and consumer notebooks powered by Gobi are expected to be commercially available in the second quarter of 2008.
"Gobi-enabled notebook computers with global mobile Internet unify the most important wireless carrier network technologies deployed around the world, providing comprehensive support for all 3GPP and 3GPP2 technologies," said Dr. Sanjay K. Jha, chief operating officer of Qualcomm and president of Qualcomm CDMA Technologies. "We are leveraging Qualcomm's expertise in multi-mode wireless chipsets to bring unparalleled connectivity to notebook users, who can now be confident they can instantly access the Internet without searching for a hotspot - today."
"HP and Qualcomm share the belief that mobile Internet capability increasingly will be viewed as an essential notebook feature," said Matt Wagner, director, notebook strategy and planning, Personal Systems Group, HP. "HP welcomes the direction that Qualcomm is taking with the multi-mode Gobi technology, and the improvements it can offer notebook customers in enhanced international roaming and greater choice of mobile operator service."
Oliver Mauss, global director of business marketing for Vodafone, said "Vodafone is committed to developing the sector for laptops with built-in 3G broadband in order to meet our customers' growing need for access to data services on the move. This platform is an important step in making this technology even more accessible, and we are working closely with notebook OEMs to help them integrate this platform into their devices."
"We are excited about Qualcomm's technology as it supports our mission to give customers the best wireless experience, whether in the United States or abroad," said Andrea Caldini, executive director, product management & development for Verizon Wireless. "Qualcomm's leadership role in bringing Gobi to market is important for customers who have increasingly chosen an embedded wireless solution. Verizon Wireless looks forward to its continued collaborative effort with Qualcomm, Vodafone and the notebook manufacturers on this project."
The embedded Gobi solution for notebook OEMs through Qualcomm customers includes Qualcomm's MDM1000™ chipset, associated software and API, and a reference design for a software-defined configurable data module supporting both EV-DO Rev. A and HSPA with full backward compatibility, as well as GPS functionality. By supporting both the 3GPP and 3GPP2 standards, notebook manufacturers can deliver products with global connectivity capabilities while benefiting from greater efficiencies and a simplified user experience.
To make it easier for Qualcomm customers and notebook OEMs to feature the Gobi solution in their notebooks and certify their products with operators, Qualcomm has introduced a common software API with support from numerous connection manager software vendors, including Birdstep Technology AB, Diginext B.V., PCTEL Inc. and Smith-Micro Software Inc.
For more information about the Gobi solution, visit: www.3Gchipsets.com/gobi
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., Qualcomm is included in the S&P 500 Index and is a 2007 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.
###
Qualcomm is a registered trademark of Qualcomm Incorporated. Gobi and MDM1000 are trademarks of Qualcomm Incorporated. CDMA2000 is a registered trademark of the Telecommunications Industry Association (TIA USA). All other trademarks are the property of their respective owners.
Qualcomm Contacts:
Emily Kilpatrick, Corporate Communications
Phone: 1-858-845-5959
Email:
[email protected]John Gilbert, Investor Relations
Phone: 1-858-658-4813
Email:
[email protected]Kira Lee, Qualcomm CDMA Technologies
Phone: 1-858-845-7571
Email:
[email protected] own?
NVTL has a partnership with QCOM. Take a look here:
http://www.novatelwireless.com/partners/strategic.html
NVTL is moving their personnel due to fires in San Diego, probably affecting
productivity, Nevertheless I think the dive is an overreaction.
Don't normally look to enter right before earnings, but took my position in SWIR today at $18.64. Seemed like the selling is to good an opportunity to miss. Well I hope for that to be the case ;)
Have done the same for NVTL $20.94 and SILC $17.59 (yesterday)
Good trading
good luck aussie ;)
Sierra Wireless Dn 11% On Threat From New Qualcomm Pdt >SWIR
Oct 24, 2007 11:18:36 (ET)
TORONTO (Dow Jones)--Shares of Sierra Wireless Inc. (SWIR) are down 11% following an announcement by Qualcomm Inc. (QCOM) that it plans to sell a new "embedded solution" that allows notebook vendors to connect to the Internet using the most popular cellular network standards.
The news is being perceived as negative for Sierra because the Qualcomm product, called Gobi Global Mobile Internet, will make it easier to build the wireless modems that Sierra makes, potentially increasing competition. As well, it could mean that Qualcomm, which provides the raw materials that Sierra uses to make its modems, plans to become a direct competitor to Sierra and other wireless-modem makers.
In an interview Wednesday, Sierra Chief Executive Jason Cohenour said the announcement has positive and negative elements with respect to Sierra. On the positive side, it means Sierra has a new product to sell, as Qualcomm indicated it intends to market the Gobi product through its customers, which include Sierra. On the negative side, Gobi makes it easier for other companies to do what Sierra does, he said. "(Gobi) lowers the bar for other competitive entrants," he said.
On Nasdaq Wednesday, Sierra, which is scheduled to report its third-quarter results Thursday after the close, is down $2.30 to $18.72 on about 572,000 shares. Novatel Wireless Inc. (NVTL), Sierra's main rival, is down 15% to $20.97.
I was just finishing lunch with Ramsburg when my wife called me saying the Main was down 5% on the day, so I came in a hurry to see what's going on.
I see that the main reasons for the drop are sell offs in GSB (which has been up a lot, so mere profit taking explains the drop), and NVTL and SWIR down 10% plus.
I thank soxguy for bringing us the probable cause for the big drop but I need time and a cool head to study if this is truly competition or not, and if so, by how much it will impact the fundamental forecasts I've made.
As it is a Main Portfolio rule I won't make any intraday decisions, even if because of this I'll take some more risk. Diversification is there for these cases.
Anyway, so far this is the worst day the Main Portfolio ever had :-\ I was right in not being too happy when it rose 4.6% the other day ... so I'm not :'( today, just business as usual.
I'll update NVTL's and SWIR's analysis after the close following an in depth study on QCOM's technology.
Sierra Wireless Dn 11% On Threat From New Qualcomm Pdt
So the bottom line is that QCOM appears to be cutting out the middleman (SWIR) and will deal directly w/ HP (SWIR's largest customer).
"HP and Qualcomm share the belief that mobile Internet capability increasingly will be viewed as an essential notebook feature," said Matt Wagner, director, notebook strategy and planning, Personal Systems Group, HP. "HP welcomes the direction that Qualcomm is taking with the multi-mode Gobi technology, and the improvements it can offer notebook customers in enhanced international roaming and greater choice of mobile operator service."
http://biz.yahoo.com/prnews/071024/law085.html?.v=101
No matter what, not good news. Hopefully earnings will be strong and mgmt. can address the issue during the cc.
David, see if you can find any info on SWIR and NVTL planning on using the mobile WiMax 802.11e. If that's the case, it will provide huge competition to QCOM's low data rate solution that uses existing 3GPP and GPRS networks. The problem may be that QCOM may plan doing the same transition... :-\
Hi everybody,
Rough day for the Main… But like David said the 2 catalysts for this big drop are NVTL and SWIR, the rest of the portfolio is just having a normal profit taking drop with no issues (perfectly normal after the recent run).
I’ve just talked with David on the phone about NVTL / SWIR and the effects of Qualcomm’s new «Gobi» technology, this will need some further investigation from our side, but after reading this (thanks la-onda):
Quote from: la-onda on October 24, 2007, 12:05:43 PM
In an interview Wednesday, Sierra Chief Executive Jason Cohenour said the announcement has positive and negative elements with respect to Sierra. On the positive side, it means Sierra has a new product to sell, as Qualcomm indicated it intends to market the Gobi product through its customers, which include Sierra. On the negative side, Gobi makes it easier for other companies to do what Sierra does, he said. "(Gobi) lowers the bar for other competitive entrants," he said.
I’m not sure how to read this kind of statement, taking in consideration it came from a Chief Executive at SWIR and he’s not going to be drastic in any statement… So the bottom line is that we need to dig a little more about this.
Mainly there are two pertinent questions right now:
1 - Is there a real threat of a massive coming of new competitors on to this market?
2 - What about Qualcomm? Are they going to take the lead and start dealing with NVTL and SWIR’s customers from now on? What impact does it have on both our companies?
About a massive coming of new competitors, the profit margins are relatively low, and it took several years for both companies succeed (being only 2 major players on this market)… Even with better margins and lower competitive barriers, this kind of market doesn’t appeal this sort of immediate threat, and in both cases this companies have an established position on it.
The second question is probably more relevant, we still don’t have enough information, but taking from this, we can have a problem (thanks buddjas1):
Quote from: buddjas1 on October 24, 2007, 12:58:34 PM
"HP and Qualcomm share the belief that mobile Internet capability increasingly will be viewed as an essential notebook feature," said Matt Wagner, director, notebook strategy and planning, Personal Systems Group, HP. "HP welcomes the direction that Qualcomm is taking with the multi-mode Gobi technology, and the improvements it can offer notebook customers in enhanced international roaming and greater choice of mobile operator service."
Apparently this is not good, they just talk about HP… but what if something similar happens for example with Dell? But what does it means? And in what terms? How does it will change 3SOF’s valuation model to these companies? Not sure yet… Just brainstorming here…
As a rule of our service we don’t take intraday decisions, like David said diversification is there for these cases. I’m not an expert on this matter and I’m not aware of many important business details on both companies, but from a technical standpoint we are just trading at the same level we were a few days ago (in NVTL’s case, weeks ago), and nothing has changed on the long term technical layout with todays session (although the short term is significantly damaged), anyway this is not a technical trade, so this is not important.
Later on, David will address all of these questions and interpretations in deep and I’m sure he’ll make the best decision for our portfolio.
Best regards,
CC will be interesting after the bell tomorrow
more detailed update from ETrade:
....
The news is being perceived as negative for Sierra because the Qualcomm product, called Gobi Global Mobile Internet, will make it easier to build the wireless modems that Sierra makes, potentially increasing competition. As well, it could mean that Qualcomm, which provides the raw materials that Sierra uses to make its modems, plans to become a direct competitor to Sierra and other wireless-modem makers. In an interview Wednesday, Sierra Chief Executive Jason Cohenour said the announcement has positive and negative elements with respect to Sierra. On the positive side, it means Sierra has a new product to sell, as Qualcomm indicated it intends to market the Gobi product through its customers, which include Sierra. On the negative side, Gobi makes it easier for other companies to do what Sierra does, he said. "(Gobi) lowers the bar for other competitive entrants," he said.
By introducing the Gobi product, which will allow laptops to connect to the Internet on HSPA (high-speed packet access), CDMA (code division multiple access) and EV-DO (evolution, data optimized) networks, Qualcomm is attempting to fend off a competing wireless standard known as WiMAX. However, because Gobi moves the San Diego company in the direction of competing with its customers, it will need to convince its licensees that it doesn't intend to go into the equipment business, Cohenour said. "I don't think that's their intent," he said.
Still, in its release Wednesday, Qualcomm included a supporting quote from Hewlett-Packard Co. (HPQ), Sierra's biggest customer for embedded modules. An embedded module is a type of wireless modem that is built into a laptop. The inclusion of the Hewlett-Packard testimonial in the release suggests that Qualcom could be working with Hewlett-Packard and, at the very least, raises uncertainty about the future of the HP-Sierra relationship, one analyst said.
Officials from Qualcomm weren't immediately available for comment.
Cohenour said Hewlett-Packard remains a Sierra customer and that, as with all customers, Sierra needs to earn and re-earn the business with every product cycle. "(Sierra) is well-positioned but that doesn't guaranteee us the business," he said.
Cohenour said he is disappointed with the decline in Sierra's stock Wednesday. "Like I said, there's a positive element and a negative element. So I'm taking a bit more of a balanced view."
&
SWIR: Short Interest UP 42.8% to 3.1M in Mid Oct 2007
Wednesday, October 24, 2007 16:26ET
According to new short interest data from NASDAQ, short interest for Sierra Wireless, Incorporated (NasdaqNM: SWIR) INCREASED 42.8% to 3,061,222 shares as reported in mid-October, 2007.
SYMBOL END SEPTEMBER MID OCTOBER CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
SWIR 2,143,367 3,061,222 +917,855 +42.82% 4
Based on SWIR's 20-day average daily share volume of 828,295, it would require approximately 4 day(s) of buying to cover this short interest.
Interesting statement from Yahoo:
1)
Qualcomm bypassing SWIR and NVTL doesn't exactly fit this graphic, so I'm skeptical.
Bypassing a manufacturer and making a product itself. Qualcomm makes chips, not boards. NVTL and SWIR are the embedded board and device manufacturers. Qualcomm would be violating their own business model if they decided to create their own embedded board based on the chipset.
Businessmodel from Qualcomm:
Qualcomm develops new technology through investment in R&D and strategic acquisitions and fosters competition by broadly licensing the rights to use its patented technology. Further, Qualcomm provides its customers the opportunity to easily and quickly develop and introduce their products by providing chips and software that integrate Qualcomm's technology. Additionally, Qualcomm has worked to reduce its customers' intellectual property costs and minimize intellectual property disputes within the industry through the cross-licenses it has obtained from a very large number of significant patent holders.
2)
also from Yahoo:
Helpful hings for Jason Tommorrow (2 Ratings) 24-Oct-07 02:22 pm
why have faith in this company??
1. sierra's markets are growing at a CAGR of over 50%
2. most providers are just getting serious about wireless data services... and are just beginning to see rising revenues from them...check out ATT's earnings and comments on wireless data services yesterday we are and will continue to be a direct beneficiary of this trend
3. Our penetration into the market for existing laptops is less than XXX% (2%??) honestly....what is the likelihood that the entire world will upgrade their legacy laptops for essentially the same functionality that they can already have?? i.e sierra and novatel solutions from their wireless service providers... (in many cases free aircards with a data services contract)
4. qualcomms announcement only applies to computers that will ship as of the second quarter of 08 (probably the end.. would you hold off on a purchase of a new computer for 6 to 7 months for this reason when their are existing solutions from your wireless provider... ???? we still have 2 full quarters of PE compresssion AKA higher earnings with no new competition... if anything this gives us a clearer picture of the competition until that time... (there wont be additional competitors for 7 months)
5. Sierra will still be able to make products with the new embedded devices... and with its marquis name... will be a leader...tapping into a new market growth segment... enjoying an additional revenue stream and larger revenue for existing cards due to expanded market awareness and ever cheaper ubiquity of data services.
6. Qualcom's product does not support WI-FI.............. in other words there are still growth ops for Sierra acquisitions and product line broadening.
7. Earnings are out tommorrow and should reflect the same strong growth in data services that ATT's earnings reflected yesterday.. as sierra and novatel are the only two options ithey offer. The Wireless Data service wave is just beginning and we are first up. We are now virtually guaranteed 7 months of unhindered compteition worldwide.
Food for thought:
I could be wrong but both SWIR and NVTL are QCOM customers supplied
with a new chip for Gobi products, but unless they already knew about it
they can't start making embedded solutions before they invest in R&D
and that will take some time before launching.
Is QCOM ready to step on and crush these two partnerships ??
Maybe they had to come out with some kind of announcement to
neutralize their competition.
Is the market ready for massive use of Gobi??
Just my two cents for discusion.
Thanks for your contributions :)
I guess the explanation to why SWIR was trading at a discount when compared to NVTL was that "somebody" knew QCOM was working directly with HP, which, as buddjas1 mentioned, is SWIR's biggest costumer.
NVTL's and SWIR's businesses and fundamental trends are very similar, and that's why I bought SWIR in the first place, I was so convinced about the global move to a mobile internet connection, from fixed and wireless, that I wanted more exposure to the industry.
It appears it wasn't a smart move, not because the move to mobile won't happen, but because technological breakthroughs, competition and margin compression will make the businesses not worth a lot 5 years from now. This is always the risk with technology companies, because technology changes quickly and investors need to believe in future value to attach a high value in the present. Stocks like HAUP, for example, suffer from this problem. The company may have the highest revenues and profits now that investors won't care, because they believe HAUP's technology will become obsolete in a couple of years time. So they attach a low earnings multiple to the stock. CPNE is another example, however different, in that case investors thought (and rightly so), that there weren't all that many ignorant consumers available to buy the company's "fraudulent" services.
Anyway, coming back to SWIR, the stock is trading with a discount relative to NVTL, but is that discount enough to make it attractive as a long term investment?
To answer these questions I'll make the same adjustments I made to NVTL's valuation model (http://www.3stocksonfire.org/trading/index.php?topic=9157.msg107604#msg107604).
The following is the original valuation model with my original estimates:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41315;image)
And this other one is the valuation model after the adjustments explained in NVTL's thread:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41314;image)
Results tell me the SWIR is still attractive, with an optimal selling price of $23.05, but not terribly so.
SWIR's earnings will be released today after the close, and I'm sure they will be good and guidance will be revised higher. Most probably there's also going to be smart talk in relation to QCOM's issue, which will relief investors and prompt others to buy.
I've already decided to sell NVTL, but I think it is prudent to keep SWIR at least one more day ... my final decision as it relates to the Main Portfolio is to HOLD SWIR.
Swir up nicely AHSierra Wireless Reports Third Quarter 2007 Results
Thursday October 25, 4:35 pm ET
TSX: SW Nasdaq: SWIR
VANCOUVER, Oct. 25 /PRNewswire-FirstCall/ - Sierra Wireless, Inc. (NASDAQ: SWIR, TSX: SW) is reporting third quarter 2007 results.
Our results are reported in US dollars and are prepared in accordance with United States generally accepted accounting principles.
ADVERTISEMENT
"During the third quarter of 2007 we experienced continued strong momentum in our business and achieved record quarterly revenue and earnings" said Jason Cohenour, President and Chief Executive Officer. "Our strong results were driven by a combination of continued solid shipments of our AirCard products to existing operator channels, initial shipments of our new HSUPA products, growth in our OEM business and a full quarter of contribution from AirLink. These factors contributed to year over year revenue growth of 112%, improved gross margin and a significantly improved operating margin of 10.4%. During the quarter, our channels reported record sell through of our products and our bookings were strong. These trends, combined with new HSUPA product momentum, give us good revenue visibility and support our expectations for growth and improved profitability in Q4.
Early in Q4, we also achieved an important strategic milestone, closing a new equity issue and raising gross proceeds of $85.1M. We intend to use the net proceeds from this transaction to help fuel the execution of our strategy, including potential acquisitions that we believe will help drive further gains in shareholder value."
Q3 2007 Financial Results
Our revenue for the third quarter of 2007 amounted to a record $111.5 million, gross margin was $33.1 million, or 29.7% of revenue, operating expenses were $21.4 million and net earnings were $9.0 million, or diluted earnings per share of $0.33. Integration costs related to the AirLink Communications, Inc. ("AirLink") acquisition were not material in the third quarter of 2007. Our balance sheet remains strong, with $102.8 million of cash and short and long-term investments, which includes the generation of cash from operations of $14.2 million and excludes the proceeds raised from the equity issue that closed in early Q4.
Results for the third quarter of 2007, relative to guidance provided on July 26, 2007 are as follows:
Third quarter revenue for 2007 of $111.5 million was better than our
guidance of $109.0 million. Our earnings from operations were
$11.6 million, better than our guidance of $9.4 million. Our net
earnings of $9.0 million, or diluted earnings per share of $0.33,
were also better than our guidance of net earnings of $7.6 million,
or diluted earnings per share of $0.27.
Results for the third quarter of 2007, compared to the third quarter of 2006 are as follows:
Third quarter revenue increased by 112% to $111.5 million in 2007
from $52.5 million for the same period in 2006. Gross margin for the
third quarter of 2007 was 29.7% of revenue, compared to 30.2% for the
same period in 2006. Operating expenses were $21.4 million in the
third quarter of 2007, compared to $15.8 million in the same period
of 2006. Net earnings for the third quarter of 2007 were
$9.0 million, or diluted earnings per share of $0.33, compared to net
earnings of $1.1 million, or diluted earnings per share of $0.04, in
the same period of 2006.
Our third quarter results for 2007 include a full quarter of
contribution from AirLink. AirLink contributed revenue of
$9.5 million at a gross margin of 53.2% in the third quarter of 2007.
Included in our results are stock-based compensation expense and
amortization resulting from the acquisitions of AirPrime, Inc. in
2003 and AirLink in May 2007. Adjusting for these amounts, our
non-GAAP results are as follows:
(in millions of U.S. dollars) Q3 2007 Q3 2006
--------- ---------
Earnings from operations - GAAP $ 11.6 $ 0.1
Stock-based compensation 1.5 1.0
Acquisition related amortization 1.0 0.3
--------- ---------
Earnings from operations - Non-GAAP $ 14.1 $ 1.4
Net income - GAAP $ 9.0 $ 1.1
Net income - Non-GAAP 10.9 2.1
Diluted earnings per share - GAAP $ 0.33 $ 0.04
Diluted earnings per share - Non-GAAP 0.39 0.08
Results for the third quarter of 2007, compared to the second quarter of 2007 are as follows:
Revenue for the third quarter of 2007 increased by 4% to
$111.5 million, compared to $107.4 million in the second quarter of
2007. Gross margin was 29.7% of revenue in the third quarter of 2007,
compared to 27.0% in the second quarter of 2007. Operating expenses
were $21.4 million in the third quarter of 2007, compared to
$20.9 million in the second quarter of 2007. Net earnings for the
third quarter of 2007 were $9.0 million, or diluted earnings per
share of $0.33, compared to net earnings of $6.7 million, or diluted
earnings per share of $0.25, in the second quarter of 2007.
Third Quarter Highlights Included:
- Commercial availability of our AirCard® 595U USB modem from
Verizon Wireless for use on Verizon's Broadband Access service.
- Commercial availability of the AirCard 595U USB modem and the
AirCard 597E ExpressCard from Telecom New Zealand for use on the
Telecom Mobile Broadband service.
- Commercial availability of our AirCard 595 PC card and the
AirLink PinPoint X and Raven X products from Bell Mobility of
Canada for use on Bell's high-speed EVDO Rev A network.
- Commercial availability of the new HSUPA AirCard 880U USB modem
and AirCard 880E ExpressCard from Telstra of Australia for use on
Telstra's Enhanced Next G(TM) HSPA network.
- Together with Fujitsu PC Asia Pacific, we announced that our
MC8780 embedded module is integrated into the new LifeBook P7230
and S6410 to provide HSUPA mobile broadband connectivity. Both
platforms are now commercially available in Hong Kong for use on
the SmarTone-Vodafone network and in Japan for use on the
NTT DoCoMo network.
- We announced a bought deal to raise gross proceeds of
US$78.4 million from the sale of 3,500,000 common shares in the
United States and Canada at a price of US$22.40 per share. On
October 2, 2007, after the quarter end, we closed the offering and
sold 3,800,000 common shares from treasury, which included
300,000 shares issuable upon the exercise by the underwriters of
the over-allotment option. Gross proceeds of this offering were
$85.1 million. We expect to use the net proceeds from the offering
for general corporate purposes, working capital and potential
future acquisitions.
Financial Guidance
The following guidance for the fourth quarter of 2007 reflects our current business indicators and expectations.
Our revenue expectations for the fourth quarter of 2007 are driven by strong demand that is moderated by expected supply constraints on some components.
Similar to the third quarter of 2007, our guidance for the fourth quarter includes a significant revenue contribution from expected new product and channel launches. There are uncertainties associated with the launch and early ramp of new products that could affect our ability to achieve guidance. As a result of our anticipated new product launch activity, we expect fourth quarter operating expenses to increase relative to the third quarter.
Inherent in this guidance are risk factors that are described in detail in
our regulatory filings. Our actual results could differ materially from those
presented below. All figures are approximations based on management's current
beliefs and assumptions.
Non-GAAP Adjustments
--------------------------------------------
Acquisition Integration
Q4 2007 Guidance GAAP Stock Comp Amortization(1) Costs
---------------- ---- ---------- --------------- ------------
Revenue $125 million
Earnings from
operations $12.8 million $1.5 million $1.0 million $0.2 million
Net earnings $11.1 million $1.1 million $0.8 million $0.1 million
Diluted
earnings
per share $ 0.35/share
Non-GAAP
--------
Revenue $125 million
Earnings from
operations $15.5 million
Net earnings $13.1 million
Diluted
earnings
per share $0.42/share
(1) Represents purchase price amortization associated with the
acquisition of AirLink Communications, Inc. in May 2007 and the
acquisition of AirPrime, Inc. in 2003.
Conference Call, Webcast and Instant Replay
We will host a conference call to review our results on Thursday, October 25, 2007 at 2:30 pm PST, 5:30 PM EST. You can participate in the conference call either via telephone or webcast. To participate in this conference call, please connect approximately ten minutes prior to the commencement of the call.
Telephone participation:
Please dial the following number:
1-800-733-7560 Passcode: Not required
or
1-416-644-3414 Passcode: Not required
Short version. DJ Sierra Wireless Posts Record 3Q On Several Factors >SWIR
DOW JONES NEWSWIRES
Vancouver's Sierra Wireless Inc. (SWIR) posted record revenue and earnings in the third quarter, driven by a combination of continued solid shipments of AirCard products to existing operator channels, initial shipments of new HSUPA products, growth in the OEM business and a full quarter of contribution from AirLink.
Sierra earned $9 million or 33 cents a share in the quarter, up from $1.1 million or 4 cents a year earlier.
Non-GAAP earnings improved to $10.9 million or 39 cents a share from $2.1 million or 8 cents, exceeding the First Call earnings estimate of 27 cents a share for the latest quarter.
Revenue jumped to $111.5 million from $52.5 million.
For the fourth quarter, Sierra anticipates revenue of $125 million, driven by strong demand that is moderated by expected supply constraints on some components. It expects GAAP earnings of $11.1 million or 35 cents a share.
-Tara Zachariah; 416-306-2100;
[email protected] (END) Dow Jones Newswires
October 25, 2007 16:51 ET (20:51 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 04 51 PM EDT 10-25-07
**Brought to you by Scottrader, a product of Scottrade Inc*
Revenues in q3 were $111 million; upped revenue quidance next quarter to be $125 million.
2007 revenues will end up being over $530 million. :o
Net profit margin increased to 10.7% :D
1st upgrade:
SWIR: US Bancorp Ups to Outperform from Mkt Perform; Analyst Notes
Friday , October 26, 2007 07:28ET
Issuer: Sierra Wireless, Incorporated (NasdaqNM: SWIR)
Analyst Firm: U.S. Bancorp Piper Jaffray
Ratings Action: UPGRADE
Current Rating: Outperform (from Mkt Perform)
Analyst Comments: The upgrade follows strong Q4 results and guidance.
&
Sierra Wireless Shares Climb After Big Earnings Increase and Strong Guidance
NEW YORK (AP) -- Shares of Sierra Wireless Inc. rose in Friday premarket trading after the company reported third-quarter profit jumped eight fold and issued fourth-quarter guidance above Wall Street's forecast
Shares of Sierra Wireless gained $2.50, or 13.1 percent, at $21.57 in premarket trading.
CIBC World Markets analyst George Iwanyc, who kept his "Sector Outperformer" rating and $30 price target on Sierra, said the wireless broadband company is in a "leadership position in a "strong" market.
"Sierra once again delivered a strong quarter and the outlook suggests momentum is growing," Iwanyc said in a client note. "We see several drivers to sustain the growth in 2008."
Demand for Sierra's products should continue to grow in the fourth quarter and beyond as the company expands its 3G technology and machine-to-machine connectivity, he said.
Iwanyc also said the Canadian company's AirLink platform, which allows laptop computer users to make wireless connections to the Internet, helped deliver better-than-expected results in the third-quarter. Sierra reported third-quarter profit of 33 cents per share on revenue of $111.5 million, compared with earnings of 4 cents per share, or $52.5 million, in the year-ago period. For the fourth quarter, Sierra expects earnings of 35 cents per share on revenue of $125 million. Analysts, on average, expect profit of 28 cents per share on sales of $116.2 million, according to a poll by Thomson Financial.
Soxguy, could you please check your format before posting. It is much easier to read afterwards....
thanks in advance
QuoteSWIR's earnings will be released today after the close, and I'm sure they will be good and guidance will be revised higher. Most probably there's also going to be smart talk in relation to QCOM's issue, which will relief investors and prompt others to buy.
Everything happened as expected.
QuoteI've already decided to sell NVTL, but I think it is prudent to keep SWIR at least one more day ... my final decision as it relates to the Main Portfolio is to HOLD SWIR.
It was a good decision, since SWIR is up 13.8% in pre-market.
EPS was $0.33, compared to the $0.27 guidance. And they gave $0.35 EPS guidance for Q4. This tells me full year 2007 EPS will be at least $1.13, while the average analyst estimate was calling for $1.01. Clearly, 2008 EPS will be higher than the $1.19 estimate, so analysts will have to raise their estimates.
On Gobi, they said they confirmed with Qualcomm that QCOM will sell Gobi through its existing and potential new costumers, like SWIR and NVTL, and not directly to HP or mobile carriers. So, Gobi is a new product for SWIR to sell, and this is the good news. The bad news from Gobi is that, as they say, it will lower the barrier for new competition.
In the Q&A session, the CEO said Gobi won't increase SWIR's profit margins, and it is still too early to say if it will lower margins. This isn't good, they're admitting potential price pressures due to competition.
Revenue grew 4% from Q2, and 112% from Q3 2006, but I want to focus on this Q3 2007 - Q2 2007 growth. Growth is a lot slower than a 53% CAGR in units shipped should imply, so this means average selling prices are coming down. I believe my 40% revenue CAGR estimate is appropriate and perhaps even a bit optimistic, given that I see pressure in average selling prices.
The optimal selling price given by my valuation model is $23.05 (http://www.3stocksonfire.org/fundamental.model.php?ticker=SWIR&portfolio=main) and the stock is trading at $21.55 in the pre-market. The 2007 earnings multiple is currently 19.1 and I think the earnings multiple will remain at around 18 for the long term.
My final decision is to SELL SWIR around today's open.
SWIR made a higher low, but it will face significant overhead resistance now. We'll see what happens next: