realcoolhead suggested that I should take a look at NVTL as the stock kept going up even as the market went down. I've looked and I love it as a long term holding.
I made this video analysis yesterday giving it an 8 on a 1-10 scale:
This is the recent news moving the stock higher:
• Novatel Forecasts 1Q Earnings Growth (http://biz.yahoo.com/ap/070227/novatel_wireless_outlook.html?.v=1)
AP (Tue, Feb 27)
As I look at the company's website, at www.novatelwireless.com, I particularly enjoy those "on the go mobility" products. I don't know if that has been happening a lot in the US, but here in Portugal people are buying tons of that stuff (I have two of them from two different mobile operators), and remember, our economy is one of the weakest in the World :'( (we're growing at just about 1% a year).
The trading plan is:Buy NVTL, 6.66% of capital as always.
Good news out from NVTL yesterday:
• Verizon Wireless Offers First ExpressCard by Novatel Wireless to Take Advantage of New Faster Wireless Broadband Network (http://biz.yahoo.com/prnews/070315/clth056.html?.v=82)
PR Newswire (Thu 8:30am)
The news didn't have much impact on yesterday's session, but it is another step for the company to meet or exceed my long term estimates.
NVTL only looks small on one thing: the market cap of just $436 M, but probably that is just a matter of time :)
I'll continue holding NVTL.
NVTL keeps pushing higher and showing relative strength. Today I don't have much time to do this update (because the website experienced unexpected technical difficulties) but on tomorrow's update I would like to see what is the revenue breakdown between different product categories, and which are experiencing the highest growth.
I'll continue holding NVTL.
Quoteon tomorrow's update I would like to see what is the revenue breakdown between different product categories, and which are experiencing the highest growth.
Unfortunately the company doesn't breakdown revenues through product categories. I got this interesting information from the latest 10-Q:
«Lead the Embedded Market. In 2005 and 2006, we received design wins from six leading laptop manufacturers and additional mass market device manufacturers to embed our 3G products into their product lines. These wins included Dell and Toshiba—two of the world's largest laptop manufacturer. In the future, we will continue to pursue additional opportunities with these OEM partners and with other leading laptop manufacturers as we look to consolidate the largest market share of the embedded market. For some of our OEM partners, we build to order; for others, our technology is embedded in specific wireless SKUs; and for others, our technology is embedded into complete laptop lines. Most of our customers are addressing world-wide markets and are shipping both our EV-DO and HSDPA products.»
I really like when companies that make peripheral products are able to sell them with the main product, though agreements with OEM's. This way they sell a lot more.
I'll keep holding and studying NVTL.
Have you ever heard the term: "the trend is your friend"? I have and I'll keep holding NVTL, awesome chart, thanks for the wake up call on NVTL realcoolhead :)
NVTL had revenues of $55 M in Q3 2006 and $77 M in Q4 2006, and that's a 40% quarter on quarter sequential increase. That's even better than GIGM's revenue growth rate of 23% over the same period (but obviously net profit margin is a lot higher in GIGM's case).
Analysts expectations for Q1 07 are for revenue of $80.5 M. So, after a 40% quarterly increase, they're estimating just 4.55% growth. Do you believe it? I don't, I bet NVTL will surpass estimates by a wide margin.
I'll keep holding NVTL.
As I was feeling sick yesterday I sat down and watched some TV, mainly the news channels here in Portugal, and to my surprise, when commercial ads started, Novatel Wireless products were splashed on the screen. This is because they're supplying the PC Card's for TMN, one of our mobile operators, look here:
http://www.novatelwireless.com/regions/index.html#EMEA
I mean, if a $461 M market cap company is selling as far and as small as Portugal, they're probably everywhere. And demand for wireless connectivity through a mobile operator is soaring, everybody wants it.
The chart confirms the story. Just keep on holding NVTL with strong hands.
2007 EPS expectations for NVTL have risen 133% over the last couple of months:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=34799;image)
Revenue growth in 2006 was 34.77%:
Income Statement - Annual (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=nvtl&lstStatement=Income&stmtView=Ann)
But for 2007 analysts are expecting a revenue expansion of 58%, to $344.52 M, so the company is not only growing, its growth rate is accelerating.
I believe that with this revenue expansion net profit margin will rise from 3.12% in Q4 2006 to at least double that, that is, 6.24% in full year 2007. If this happens, net income will be $21.5 M which translates to EPS of $0.72, clearly above the $0.42 average estimate.
I'll keep holding NVTL, the best is yet to come.
NVTL just updated guidance:
• Novatel Wireless Updates Financial Guidance for First Fiscal Quarter (http://biz.yahoo.com/bw/070326/20070326005429.html?.v=1)
Business Wire (Mon 8:30am)
«Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million. Non-GAAP EPS, which excludes stock based compensation expense, is expected to be above $0.35 per diluted share. These expected results compare to previous guidance of revenues of $80 million and non-GAAP EPS of $0.16 per diluted share.»
You can see on my latest update that the average analyst estimate for 2007 full year EPS is $0.42, now the company says it will earn $0.35 in the first quarter alone :o
If the company just maintains this EPS number throughout 2007 (but I expect strong growth), it will earn $1.4 in 2007, which puts the forward earnings multiple at 11, and the industry average is 29.3 !
David this stock will be traded above 30's this year ::)
strong guidance
NEWS
http://finance.yahoo.com/q/h?s=NVTL :D
David, is NVTL good enough for fire portfolio, or u will like it to close the gap and may be then load for fire?
Quote from: stocky on March 26, 2007, 10:18:37 AM
David, is NVTL good enough for fire portfolio, or u will like it to close the gap and may be then load for fire?
Good point stocky, this latest guidance from NVTL completely trounced even my optimistic projections, as you can read above, I was expecting $0.72 EPS for the full year of 2007 (analysts were calling for $0.42), now they report $0.35 for the 1st quarter alone :o
You know I don't make intraday recommendations, but over the next update for NVTL I'll review my long term estimates, given today's developments, and possibly consider NVTL as one of the best three picks of the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), therefore buying it tomorrow for the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php).
based on the latest analysts actions there has to be EPS & price target upgrades soon:
1)
Novatel Wireless upgraded to "buy"
Wednesday, February 28, 2007 2:14:23 AM ET
Montgomery & Co
NEW YORK, February 28 (newratings.com) - Analysts at Montgomery & Co upgrade Novatel Wireless Inc (NVTL.NAS) from "hold" to "buy," while raising their estimates for the company. The target price is set to $16.
In a research note published this morning, the analysts mention that the company has reported robust 4Q results, with sequential gross margins expansion. Novatel Wireless announced a robust guidance for the March quarter and 2007 based on record backlogs, solid product launches as well as strong adoption and design wins from carriers and PC OEMs. The company's gross margins are expected to continue improving this year, the analysts say. The EPS estimates for 1Q and FY07 have been raised from $0.07 to $0.15 and from $0.31 to $0.63, respectively.
2)
Novatel Wireless "accumulate," target price raised
Wednesday, February 07, 2007 2:25:06 AM ET
Research Capital
NEW YORK, February 7 (newratings.com) - Analyst Nick Agostino of Research Capital reiterates his "accumulate" rating on Novatel Wireless Inc (NVTL.NAS). The 12-month target price has been raised from $11 to $14.
In a research note published yesterday, the analyst mentions that the company has raised its revenue and EPS guidance for 4Q06 significantly ahead of the consensus and the estimates. Novatel Wireless' performance is being boosted by the robust demand for all its products, the analyst says. The company has issued impressive guidance for 2007 reflecting high visibility into its revenues and backlogs and robust demand in the modem and module markets.
first update (bought @ 16.29$) >:D:
S&P REITERATES HOLD RECOMMENDATION ON SHARES OF NOVATEL WIRELESS
S&P Marketscope - March 26, 2007 9:52 AM ET
NVTL now expects Q1 revenue and operating EPS estimates to be above $100 million and $0.35, respectively, up from prior guidance of $80 million and $0.16. The company cites acceleration of shipments previously scheduled for Q2, and improving operating leverage.
We are raising our '07 EPS estimate by $0.32 to $0.86 and our 12-month target price by $5 to $19.
We believe NVTL's expanding product diversity continues to provide benefits. However, with the shares trading at a premium to the S&P SmallCap 600 Index, we believe further upside is limited.
David,
I know you are considering NVTL, for inclusion in the 3SOF portfolio. I have a question about the portfolio.
can the 3SOF can change depending on what is currently your favorite picks?
For example, a month from now GIGM runs to $40. The future PE looks a little high, but you find a new stock XYZ which is a better value at this point in time. Do you sell GIGM and buy XYZ for 3SOF, because it is currently a better buy?, while still holding to GIGM in the main portfolio, beacuse the fundamentals haven't changed.
Another example, would be if a main portfolio pick came out with higher than expected earnings which would increase your price projections significantly. If these new price projections are higher than one of the picks currently in the 3SOF portfolio would you replace the 3SOF picks with an already existing main portfolio pick.
I believe the best strategy for the 3SOF, is for you to review your picks for the 3SOF portfolio:
1) Everytime a new stock is added to the main portfolio - (Is this new pick a better investment than any current 3SOF stock.
2) On a regular basis- You should ask yourself at the end of the day. Are these 3 stocks still my favorite picks?
Beacuse of market changes and new information. I believe the 3SOF should be dynamic and updated based on whatever the current top 3 picks are.
I bought some today @ 16.51 8)
This stock is very attractive.
on fire
>:D >:D
Novatel Wireless Updates Financial Guidance for First Fiscal Quarter
First Quarter Revenues Expected to Eclipse $100 Million Non-GAAP EPS Expected Above $0.35 per Diluted Share
SAN DIEGO, Mar 26, 2007 (BUSINESS WIRE) -- Novatel Wireless, Inc. (Nasdaq:NVTL), a leading provider of wireless broadband access solutions, today updated its guidance for the first quarter ending March 31, 2007.
Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million. Non-GAAP EPS, which excludes stock based compensation expense, is expected to be above $0.35 per diluted share. These expected results compare to previous guidance of revenues of $80 million and non-GAAP EPS of $0.16 per diluted share.
"First quarter revenue and net income will be the highest in company history," commented Brad Weinert, acting chief executive officer and chief operating officer of Novatel Wireless. "We believe this is a clear indicator of the underlying strength of our market and the success of our growth and diversification strategy. Our first quarter performance is being driven by strong shipments of the Company's EV-DO Rev. A ExpressCards and over $30 million in revenues from the Company's higher margin Ovation product line, including both follow-on orders and initial stocking orders. Due to higher than expected demand for Ovation devices by our domestic customers, some initial stocking orders, previously expected to be shipped in Q2, were accelerated and will be shipped within the quarter contributing to the higher-than expected revenue."
"With gross margins currently anticipated to be greater than 30% and strong leverage over operating expenses, we expect operating margins to top 15% as we are still scaling our internal infrastructure to meet the increased demand," commented Dan Halvorson, Novatel Wireless' chief financial officer. "We look forward to providing more detail on our first quarter results and updating annual 2007 Guidance on our first quarter conference call scheduled for May 1st." product line, including both follow-on orders and initial stocking orders." [/b]
http://www.smartmoney.com/onedaywonder/index.cfm?story=20070326&afl=yahoo
QuoteI believe the best strategy for the 3SOF, is for you to review your picks for the 3SOF portfolio:
1) Everytime a new stock is added to the main portfolio - (Is this new pick a better investment than any current 3SOF stock.
2) On a regular basis- You should ask yourself at the end of the day. Are these 3 stocks still my favorite picks?
Beacuse of market changes and new information. I believe the 3SOF should be dynamic and updated based on whatever the current top 3 picks are.
I agree eggman11, that is the planned course of action, thanks for bringing this up. I'll also open the About the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/trading/index.php?topic=9141.0) thread so one can discuss these matters in the proper place.
Quote from: dragonamg on March 26, 2007, 05:33:23 PM
I bought some today @ 16.51 8)
This stock is very attractive.
Good move dragonamg :)
I saw the initial video analysis again, and I see I was calling for just 20% average annual revenue growth. Now the company gives me this:
«Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million.»
Average annual revenue growth since 2003 was 80%, but that very high growth rate is accelerating, not slowing down as I expected.
But what is even more impressive is the margin expansion:
«"With gross margins currently anticipated to be greater than 30% and strong leverage over operating expenses, we expect operating margins to top 15% as we are still scaling our internal infrastructure to meet the increased demand," commented Dan Halvorson, Novatel Wireless' chief financial officer.»
You see, operating margin in Q4 2006 was just 3.3%, now the company is talking about 15% :o And they don't have interest expenses, they have interest income, so net profit margin will probably rise to 10% plus, and my long term estimate was just 7.5%.
So, we have much stronger than anticipated growth and much more profitability on each $ sold. This is a perfect fundamental storm >:D
Now I see I really need to build a "long term estimates" model, so we can just go there, adapt the changes and get an end result. What I'm also thinking is that maybe I should have a 1 year estimate, 2 years, 3 years, 5 years, 10 years and maybe 20 and 30 years. This way we could, perhaps, go riding the wave of the most promising stocks on a 2 - 5 year estimate, but when growth started to slow, we would shift to new promising stocks. But now I think ... why shouldn't a stock with, say, a 30% a year performance just continue being better than most others?
I'll have to think more on the issue, these sure are interesting times.
As for NVTL, I believe yesterday's fundamental change should without a doubt make it double or more over the next 6 months, so I'm going to buy it to the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php) too.
Thanks realcoolhead :)
David does this make any sence to you ?
(("First quarter revenue and net income will be the highest in company history," commented Brad Weinert, acting chief executive officer and chief operating officer of Novatel Wireless. "We believe this is a clear indicator of the underlying strength of our market and the success of our growth and diversification strategy. Our first quarter performance is being driven by strong shipments of the Company's EV-DO Rev. A ExpressCards and over $30 million in revenues from the Company's higher margin Ovation product line, including both follow-on orders and initial stocking orders. Due to higher than expected demand for Ovation devices by our domestic customers, some initial stocking orders, previously expected to be shipped in Q2, were accelerated and will be shipped within the quarter contributing to the higher-than expected revenue."
look at this paragraph in red !!
maybe will we have a bad Second Quarter ??
When I first looked at it I also had that thought Garoh, but when we read the reasons behind your sentence highlighted in red:
QuoteDue to higher than expected demand for Ovation devices by our domestic customers, some initial stocking orders, previously expected to be shipped in Q2, were accelerated and will be shipped within the quarter contributing to the higher-than expected revenue."
In my view what this means is: orders were scheduled to be shipped in Q2, but demand at the final costumer was so strong that NVTL's costumers needed the product now so NVTL shipped it right away.
This doesn't mean demand will be less in Q2, in fact I believe it means it will be more, as the more demand the more demand in this phase of the product cycle.
Let's just check those "Ovation devices":
Novatel Wireless Fixed Mobile Convergence Products (http://www.novatelwireless.com/products/ovation/index.html)
Yummi :)
They look interesting ....
I think this stock should be trading above 30's this before the end of this year ;D
joke of the day:
Novatel Wireless downgraded to "market perform"
Tuesday, March 27, 2007 4:31:16 AM ET
Avondale Partners
NEW YORK, March 27 (newratings.com) - In a research note published yesterday, analysts at Avondale Partners downgrade Novatel Wireless Inc (NVTL.NAS) from "market outperform" to "market perform." The target price is set to $15.
:D
The bro's at the analyst firm want to stuff their pockets with the stock before letting it fly. Greedy bastards. :)
You thanked me too many times and I have to say something:
You are so welcome. I am glad I made a little bit contribution to the board! ;D
Quote from: David Randolph on March 27, 2007, 03:16:55 AM
Thanks realcoolhead :)
two upgrades:
1)
Novatel Wireless "buy," target price raised
Tuesday, March 27, 2007 4:50:14 AM ET
Montgomery & Co
NEW YORK, March 27 (newratings.com) - Analysts at Montgomery & Co maintain their "buy" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company. The target price has been raised from $16 to $21.
Ina research note published this morning, the analysts mention that the company has recently pre-announced robust results for the March quarter, with significant margin expansion. This stellar performance was driven by Novatel Wireless' varied portfolio of products including ExpressCard solutions and Ovation (FMC) products, the analysts say. The company's long-term competitive outlook continues to remain positive, Montgomery & Co adds. The EPS estimates for 2007 and 2008 have been raised from $0.63 to $0.87 and from $0.75 to $0.97, respectively.
2)
Novatel Wireless "accumulate," target price raised
Tuesday, March 27, 2007 9:47:03 AM ET
Research Capital
NEW YORK, March 27 (newratings.com) - Analyst Nick Agostino of Research Capital reiterates his "accumulate" rating on Novatel Wireless Inc (NVTL.NAS), while raising his estimates for the company. The target price has been raised from $14.75 to $19.00.
In a research note published this morning, the analyst mentions that the company has raised its revenue guidance for 1Q from $80 million to more than $100 million, significantly ahead of the estimates. The upward revision of the guidance reflects robust demand for Novatel Wireless' Ovation product line, and steady demand for the EV-DO and HSPA ExpressCards, the analyst says. The company expects its gross margins to improve from 28.9% exiting 4Q06 to greater than 30% in 1Q. The EPS estimates for 1Q07, 2007 and 2008 have been raised from $0.16 to $0.35, from $0.66 to $0.88 and from $0.86 to $1.00, respectively.
Its funny but I have been NovaTel Broadband card user for good six months and when David selected the stock I had feeling that I heard the company, where and when, I had no clue. But today when I looked back at my Verizon Receipts I found that I have been a proud owner of Novatel bb card. Small world.
Thanks for posting the analysts views la-onda. In my view they're still way below where they should be in terms of 2007 EPS estimates, which seem ridiculously low to me, even when considering the most optimistic of them.
There's just a bit of seasonality in NVTL's business, but just a bit. The most optimistic analyst you have there calls for $0.88 EPS for the full year 2007. But come on, the company already said it will make $0.35 in Q1 alone. It would have to make an average of just $0.177, almost half of the first quarter, to make just $0.88 in full year 2007.
My take is those estimates will continue to be raised to something more like $1.5 EPS for 2007.
The fundamental turnaround was very powerful in Q4 2006, but what is really awesome is the margin expansion in Q1 2007. Operating margin expanded from 3.3% in Q4 2006 to 15% plus in Q1 2007. This completely changes the valuation of a business.
I see NVTL share price doubling over the next 6 months. I believe I've never been so sure about a stock as I am with this one. It's a sure thing (a sure thing in the stock market means there's about 80% probability of you being right and the stock going up hehe).
Quote from: stocky on March 28, 2007, 12:46:43 AM
Its funny but I have been NovaTel Broadband card user for good six months and when David selected the stock I had feeling that I heard the company, where and when, I had no clue. But today when I looked back at my Verizon Receipts I found that I have been a proud owner of Novatel bb card. Small world.
Yep stocky, as we embrace fundamental analysis more and more I bet you'll be more attentive to see if what you're buying is made by a publicly traded company :)
I'll keep letting the profits run on NVTL, the next billion dollar company!
News:
Novatel Wireless Expands Expedite Family of Embedded Modules With New E725 3G EV-DO Express Mini Card
http://biz.yahoo.com/bw/070328/20070328005402.html?.v=1
Novatel Wireless Announces Plug-and-Play Software for Ovation MC870D USB Modem and Merlin X950D ExpressCard
http://biz.yahoo.com/bw/070328/20070328005403.html?.v=1
I see NVTL as a sure thing. Now we need to consider the following words from Jesse Livermore:
«The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves because they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but the intelligent patience to sit tight.
Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations.»
I'll keep holding NVTL.
well let´s laugh again ;D
1)
Novatel Wireless downgraded to "market perform" - update
Tuesday, March 27, 2007 2:38:00 PM ET
Avondale Partners
NEW YORK, March 27 (newratings.com) - Analysts at Avondale Partners downgrade Novatel Wireless Inc (NVTL.NAS) to "market perform." The target price is set to $15.
In a research note published yesterday, the analysts mention that the downgrade in rating is based on valuation. The company's share price has appreciated by 57% so far this year, the analysts report. Novatel Wireless' fundamentals remain robust and the company is expected to witness continued growth in demand for data cards and embedded modems, Avondale Partners adds.
vs.
2)
Novatel Wireless "market perform," target price raised
Thursday, March 29, 2007 2:21:16 AM ET
Avondale Partners
NEW YORK, March 29 (newratings.com) - In a research note published yesterday, analysts at Avondale Partners reiterate their "market perform" rating on Novatel Wireless (NVTL.NAS). The target price has been raised from $15 to $18.
cheers
Oliver
latest update :D:
Novatel Wireless "market perform," target price raised
Thursday, March 29, 2007 6:45:11 AM ET
Avondale Partners
NEW YORK, March 29 (newratings.com) - Analysts at Avondale Partners maintain their "market perform" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company. The target price has been raised from $15 to $18.
In a research note published yesterday, the analysts mention that the company has raised its non-GAAP EPS and sales guidance for 1Q07 from $0.16 to "above $0.35" and from $80 million to "above $100 million," respectively. Although Novatel Wireless continues to benefit from the robust strong underlying demand for its products, the company's risk-reward profile is unattractive, the analysts say. The EPS estimates for CY07 and CY08 have been raised from $0.63 to $0.82 and from $0.85 to $0.99, respectively.
Hehe la-onda, those Avondale Partners have been all over the place with NVTL ;D
I'm not expecting NVTL to close the gap opened between $15.43 and $15.95, but even if it does that, it doesn't bother me at all, as I see the stock closing 2007 above $30. Not many doubts on this forecast. I know the company's products quite well and I know demand for them is soaring. One just needs to open his eyes and know some people with a laptop computer.
Moreover, operating margin expanded from 3.3% to 15% plus :o This is a dream fundamental situation for me, if I were to hold just 1 stock, it would be NVTL.
I believe demand for NVTL products will surge over the next couple of years, here's an article that shows the trend towards mobile internet:
Sprint adds EV-DO Revision A to more markets (http://www.networkworld.com/news/2007/032907-sprint-ev-do-revision-a.html)
NVTL is right on the center of the "mobility revolution": www.novatelwireless.com
Despite all the recent upgrades, the average analyst estimate for Q1 2007 EPS is still at just $0.26:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35027;image)
But the company already guided to "$0.35 EPS or more" for the quarter:
«Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million. Non-GAAP EPS, which excludes stock based compensation expense, is expected to be above $0.35 per diluted share. These expected results compare to previous guidance of revenues of $80 million and non-GAAP EPS of $0.16 per diluted share.»
Unless they're expecting a "stock based compensation expense" of more than $0.09 per share in Q1 2007, more upgrades will need to follow. What doesn't seem reasonable at all is the full year estimate, still at $0.59, the company will easily more than double that in my view.
I'll keep holding NVTL.
Periods 1 and 2 on the chart below are quite similar and I expect the medium term outcome to also be similar. I'll keep holding NVTL.
David we may have a new trend ::)
9EMA as first support IMHO ;)
Good news for NVTL just out:
• Novatel Wireless Updates Progress on OEM Design Wins (http://biz.yahoo.com/bw/070403/20070403005750.html?.v=1)
Business Wire (Tue 9:43am)
In depth analysis of the news on today's update.
Quote from: David Randolph on April 03, 2007, 09:54:16 AM
Good news for NVTL just out:
• Novatel Wireless Updates Progress on OEM Design Wins (http://biz.yahoo.com/bw/070403/20070403005750.html?.v=1)
Business Wire (Tue 9:43am)
In depth analysis of the news on today's update.
I believe today's news is just awesome, on top of the great news we've had over the last couple of weeks. NVTL's products will be sold with laptop computers, as everybody now wants a mobile connectivity solution, when buying a laptop PC.
Analysts are still way behind the curve on NVTL:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35135;image)
On average, analysts are still calling for just $0.59 EPS for the full year 2007, but the company already said it will earn more than $0.35 EPS in the first quarter alone. I see at least $1.40 EPS for the full year, but probably more, if we consider there will be growth.
NVTL above $30 this year is a sure thing to me.
Isn't it strange how many people are selling NVTL here, between $16 and $17, when it is "obvious" it will be a $30 plus stock in 6 months time? No, not strange, not after seeing hundreds of long term charts and comparing them with fundamentals. It's just the way things work, the market takes its time to digest new information.
I'll keep holding NVTL.
Now that I have a new valuation model that seems to serve the Main Portfolio (http://www.3stocksonfire.org/images/2007_botao_main_portfolio_forum.gif)'s purposes of achieving an above average return quite well, I need to apply the model to all holdings of the Portfolio.
For NVTL we'll start by the first working variable of the model, the dilution factor. To estimate future dilution I like to look at past dilution:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35259;image)
I considered 2004 as the base year and got a dilution CAGR of 1.5%, or dilution factor of 1.015. But I still need to check the balance sheet to get a better feel of NVTL's financial needs.
I'll do that over the next update, in the meantime I'll keep holding the stock.
QuoteI considered 2004 as the base year and got a dilution CAGR of 1.5%, or dilution factor of 1.015. But I still need to check the balance sheet to get a better feel of NVTL's financial needs.
I'll do that over the next update, in the meantime I'll keep holding the stock.
Yes, let's do that now:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35346;image)
Current ratio is 3.34. No long term debt. Cash and marketable securities of $82.7 M. Receivables & Inventories are growing, but not at a relevant level for a company with $217 M in revenues in 2006.
The balance sheet looks ok, I'll maintain that 1.015 dilution factor.
I'll keep holding NVTL.
Another great news for NVTL just out:
• Novatel Wireless OEMs and Tier-One European Operators Join Forces to Deliver Multi-Pronged 3G Product Portfolio (http://biz.yahoo.com/bw/070410/20070410005520.html?.v=1)
Business Wire (Tue 8:00am)
Just a matter of time for this awesome stock to start pushing towards $30.
Quote from: David Randolph on April 10, 2007, 08:10:55 AM
Another great news for NVTL just out:
• Novatel Wireless OEMs and Tier-One European Operators Join Forces to Deliver Multi-Pronged 3G Product Portfolio (http://biz.yahoo.com/bw/070410/20070410005520.html?.v=1)
Business Wire (Tue 8:00am)
Just a matter of time for this awesome stock to start pushing towards $30.
Hi David
I think this stock will move up as quickly as it can not like it used to be very slow ;D
I saw some guys trying to buy as much as they can , they'll drive it to the moon when it starts the engine ::)
great call David
I cannot believe this stock sits unchanged despite today's news. I think I'll just buy a couple more shares.
Quote from: buddjas1 on April 10, 2007, 02:16:35 PM
I cannot believe this stock sits unchanged despite today's news. I think I'll just buy a couple more shares.
MarketMaker ;D
Quote from: buddjas1 on April 10, 2007, 02:16:35 PM
I cannot believe this stock sits unchanged despite today's news. I think I'll just buy a couple more shares.
Yes, it's weird how consolidation periods work. It looks like the stock wants to tire short term traders before leaping.
Let's get that revenue CAGR number, starting by analyzing the revenue trend:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35422;image)
Analysts are expecting $365.9 M in revenues for 2007, but the company already said it will exceed $100 M in Q1 alone, growing more than 150% from 2006 levels :o. So my take is full year 2007 revenues will be way above than $400 M.
Anyway, the company will give full year 2007 guidance on May 1st.
The historical revenue trend is 81.4% (considering analysts estimates, which seem very conservative to me), so which should be the number I consider as revenue CAGR for the next 3 years?
Well, I understand the company's products quite well, and I believe the world will demand them for the next, say, 5 years?
I expect about 100% revenue growth in 2007, following just 35% growth in 2006, so revenue growth is accelerating.
Ok, let me shoot for a revenue CAGR of 1.6, that is, 60% a year, on average, for the next 3 years, how's that sound?
I'll keep holding NVTL.
I was going to work to try to build a reasonable net profit margin estimate but the company's fundamentals are changing so much and so fast (to the better) that I feel it is more appropriate to wait for the full year guidance that the company will share with investors on May 1st.
I'll just hold NVTL as I wait for the news, which I know will be frankly positive, but I wonder about the magnitude of the changes. Let me make this clear: I don't see any downside potential to NVTL at this point, I just can't estimate the upside potential with the current publicly known information.
I'll keep holding NVTL.
Finally NVTL was able to close above $17. I believe it is just a matter of time for it to breakout to new highs above $18.
But, what I've said yesterday still holds true, I prefer for to wait for the full year 2007 guidance from the company before estimating the 3rd variable of the model, the net profit margin. Also the company talks about Non GAAP numbers, and I want to know the impact of stock option compensation expenses and other expenses, because of course, I always work with GAAP numbers. I have some doubts about the differences between GAAP and non GAAP for NVTL, as fundamentals changed so dramatically over the last couple of quarters.
I'll derive the new valuation model after Q1 results on May 1st. In the meantime I'll keep on holding NVTL.
Technically NVTL is moving towards a new high above $18.15, and I think nothing will stop this rise before the April 1st conference call where we'll get the 2007 full year guidance.
Revenue growth and margin expansion has been so powerful in Q1 2007 that I don't know which numbers I should use as my long term estimates. For you to get an idea, NVTL said Q1 2007 EPS will be "more than $0.35", and Q4 2006 EPS was just $0.08. If you're new to this service you can read the full press release in the following link:
• Novatel Wireless Updates Financial Guidance for First Fiscal Quarter (http://biz.yahoo.com/bw/070326/20070326005429.html?.v=1)
Business Wire (Mon, Mar 26)
Whichever the 2007 full year guidance is, in my opinion NVTL is worth more than $30 a share. But I need that piece of information to derive better estimates and get to the expected share price CAGR and the correspondent optimal selling price.
I'll keep on holding NVTL.
There was no new information on NVTL, I'll keep holding the stock, waiting for May 1st and the 2007 full year guidance.
There's nothing to think about on NVTL, just sit tight and hold it through the May 1st conference call where we'll have the 2007 full year guidance. I expect a big jump up the following day and I'll keep on holding NVTL, eager to derive reasonable long term estimates, a thing that I can't do now because fundamentals changed completely over the latest two quarters.
I'm afraid of extrapolating Q4 2006 and especially Q1 2007 expected results (according to the company's guidance) because I wonder about seasonal or special effects that might have happened in Q1 2007, since net profit margin expanded a lot. I also wonder about the difference between non GAAP and GAAP numbers.
Here I am thinking too much. Just hold NVTL.
Because of eggman11's insistence on buying the three best stocks for the 3 Stocks on Fire Portfolio (I want to thank him for pressing on this issue), I derived NVTL's model using perhaps best case scenario estimates, and got this:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35819;image)
These estimates can change a lot when the company gives us the 2007 guidance, but as it is now, NVTL is just the 7th best stock in the Main Portfolio (http://www.3stocksonfire.org/3stocksonfire.php), so I can't have it at the 3 Stocks on Fire Portfolio (http://www.3stocksonfire.org/3stocksonfire_3sof.php). NVTL will be replaced by SILC at that portfolio today.
Still, given my estimates (we'll discuss them over the following updates), NVTL has an estimated share price CAGR of 46.18% and the optimal selling price is $34.4, so I'll keep holding NVTL.
NVTL will perhaps have a correction towards the ascending trendline or the 50 days SMA on the chart below, I don't have a clue about the short term. Over the medium term I see this stock over $30, so I'll keep holding it through the ups and downs. Q1 2007 results and 2007 guidance will be released next Tuesday.
NVTL trades like there are many more outstanding shares than the listed 30 million. I would not be surprised if there were actually three times that many.
Quote from: buddjas1 on April 20, 2007, 09:50:46 AM
NVTL trades like there are many more outstanding shares than the listed 30 million. I would not be surprised if there were actually three times that many.
The following was taken from the latest NVTL 10-K filed with the SEC:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=35959;image)
On March 2 they had 30,253,896 shares issued and outstanding. Do you think they're lying to the SEC or that they increased the share count by 60 million since March 2, 2007?
I don't understand why you wrote what you wrote buddjas1, it doesn't make sense to me. Please explain, thank you.
There's only one more week to NVTL's release of the Q1 results and the full year 2007 guidance. I expect very good news, since demand for the company's products (http://www.novatelwireless.com/) is growing at a torrid pace around the world.
On my valuation model I have just 30% revenue CAGR (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main), but I hope to raise this estimate when I get the full year 2007 guidance, since revenues are growing more than 150% from 2006 levels:
«
Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million. Non-GAAP EPS, which excludes stock based compensation expense, is expected to be above $0.35 per diluted share. These expected results compare to previous guidance of revenues of $80 million and non-GAAP EPS of $0.16 per diluted share.»
I'll continue holding NVTL.
Quote from: David Randolph on April 22, 2007, 05:46:17 AM
On March 2 they had 30,253,896 shares issued and outstanding. Do you think they're lying to the SEC or that they increased the share count by 60 million since March 2, 2007?
I don't understand why you wrote what you wrote buddjas1, it doesn't make sense to me. Please explain, thank you.
I know what the company says, but that does not match the way the stock acts. On March 26, over 8 million shares were traded (1/4 of the total outstanding shares) and the stock barely moved ($15.18 to $17.03). The average three month volume is over 1,300,000. That means that, if there are really only 30 million shares outstanding, all outstanding shares (not just the float) changes owners completely once per month. Stocks with 30 million shares outstanding do not trade that way. Maybe NVTL is just an anomoly. I cannot think of any other explanation for the trading activity.
Quote from: buddjas1 on April 22, 2007, 11:22:40 AM
Quote from: David Randolph on April 22, 2007, 05:46:17 AM
On March 2 they had 30,253,896 shares issued and outstanding. Do you think they're lying to the SEC or that they increased the share count by 60 million since March 2, 2007?
I don't understand why you wrote what you wrote buddjas1, it doesn't make sense to me. Please explain, thank you.
I know what the company says, but that does not match the way the stock acts. On March 26, over 8 million shares were traded (1/4 of the total outstanding shares) and the stock barely moved ($15.18 to $17.03). The average three month volume is over 1,300,000. That means that, if there are really only 30 million shares outstanding, all outstanding shares (not just the float) changes owners completely once per month. Stocks with 30 million shares outstanding do not trade that way. Maybe NVTL is just an anomoly. I cannot think of any other explanation for the trading activity.
I think that's because insider ownership is low, of the 30,253,896 shares outstanding, 29,856,658 are on the free float. For example, the Chairman owns just 60,570 shares and the CEO owns just 28,086 shares. Perhaps this explains the high trading volume, when combined with the bullish trend and probably some day trading activity.
What do you think?
Nice warm up today for tomorrow's Q1 results presentation and 2007 full year guidance. Results will be out after the market close.
(there's a mistake here, results will be out only next week)
Analysts expectations are still way behind the curve in my opinion:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36018;image)
Everything seems to be ready for a big gap up on Wednesday, because $0.62 EPS and $366 M revenue for the full year seem ridiculous when the company already said it will earn more than $0.35 EPS in Q1 alone (http://us.rd.yahoo.com/finance/freex/smart/SIG=11kf2t3nu/*http://yahoo.smartmoney.com/onedaywonder/index.cfm?story=20070326&afl=yahoo) (non GAAP, I wonder about the magnitude of the difference between non GAAP and GAAP numbers) and will have revenues of more than $100 M in the 1st quarter.
Analysts are assuming EPS and revenues will shrink throughout the year, and that doesn't seem like a reasonable expectation, given the red hot products the company manufactures (http://www.novatelwireless.com/) and the worldwide demand for these products at this point in time.
I'm expecting the best, but prepared for the worse, due to my sound diversification and money management rules. I'll hold NVTL through earnings and probably beyond.
I thought Q1 and full year 2007 results were due out next Tuesday on 05/01/2007?
Cheers,
Quote from: labatts6254 on April 23, 2007, 07:57:22 PM
I thought Q1 and full year 2007 results were due out next Tuesday on 05/01/2007?
Cheers,
You're right labatts6254, thanks for the correction, results will be out May 1st only:
• Novatel Wireless to Report First Quarter 2007 Results Tuesday, May 1st, 2007 (http://biz.yahoo.com/bw/070418/20070418005429.html?.v=1)
Business Wire (Wed, Apr 18)
fyi:
NVTL: Short Interest DN 13.1% to 5.9M in Apr 2007
Tuesday , April 24, 2007 16:19ET
According to new short interest data from NASDAQ, short interest for Novatel Wireless Inc (NasdaqNM: NVTL) DECREASED 13.1% to 5,942,802 shares for the month ended mid-April, 2007.
SYMBOL MARCH APRIL CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NVTL 6,838,672 5,942,802 -895,870 -13.10% 5
Based on NVTL's 20-day average daily share volume of 1,404,210, it would require approximately 5 day(s) of buying to cover this short interest.
Nice 1.68% rally on NVTL yesterday, as the stock approaches its recent high of $18.15, but probably we won't get above that level before the 1st quarter results that will be out next Tuesday.
I'll continue holding NVTL.
Anyone know what's up with NVTL today?
It's dropping 4-5% on no news with huge volume.
Thanks
Saw this in a Yahoo! message board:
>a large insitition or two trying to play the industry earnings by rolling money out of NVTL and >into SWIR for their earnings tommorrow, then unwinding that trade over thursday and friday >and moving back into NVTL for tuesdays earnings.--- i guess they missed that NVTL raised >guidance twice in the qtr. and SWIR didnt do it at all.
Don't know how they figure it (perhaps Level II timed buying?).
Another post read:
>This is going to be a huge huge year for Novatel.
>Embedded modules have not ramped in volume yet.
>Imagine when embedded start ramping in volume.
>From the conference call, NVTL 's embedded modules will be in over 30 laptop models and 65 >configurations.
>NVTL got Dell, Sony, Toshiba, Panasonics and many others
>just sit back and relax guys
>let the NVTL wagon take us to ~$80 a share
Quote from: berloga on April 25, 2007, 03:41:47 PM
Saw this in a Yahoo! message board:
>a large insitition or two trying to play the industry earnings by rolling money out of NVTL and >into SWIR for their earnings tommorrow, then unwinding that trade over thursday and friday >and moving back into NVTL for tuesdays earnings.--- i guess they missed that NVTL raised >guidance twice in the qtr. and SWIR didnt do it at all.
Don't know how they figure it (perhaps Level II timed buying?).
Another post read:
>This is going to be a huge huge year for Novatel.
>Embedded modules have not ramped in volume yet.
>Imagine when embedded start ramping in volume.
>From the conference call, NVTL 's embedded modules will be in over 30 laptop models and 65 >configurations.
>NVTL got Dell, Sony, Toshiba, Panasonics and many others
>just sit back and relax guys
>let the NVTL wagon take us to ~$80 a share
Thanks for the post,
I don't believe that this is being caused by MM's trying to play SWIR earnings. I read something about SWIR signing a deal with AT&T, which maybe causing the selling, but I don't buy that either.
Do you know when the embedded modules are expected to ship.
Thanks,
Quote from: eggman11 on April 25, 2007, 03:24:30 PM
Anyone know what's up with NVTL today?
It's dropping 4-5% on no news with huge volume.
Thanks
Profit taking the company's risk-reward profile is unattractive after going from $10 to 18.
Not much upside here.
I saw a release at the end of March announcing their Expedite® E725 3.1 Mbps 3G Evolution-Data Optimized (EV-DO) PCI Express Mini Card for embedded applications. OEM's would have to buy the card and the software development kit and embed the card according their system architecture. I believe usually it takes several months before a large order ramp up. I am sure E725 have been sampled to OEMs a while ago and now they are selling in some quantities. NVTL may reveal in their earnings release next week what revenue E725 generates.
Quote from: eggman11 on April 25, 2007, 03:24:30 PM
Anyone know what's up with NVTL today?
It's dropping 4-5% on no news with huge volume.
Thanks
My take is it is a short term technical thing. There's strong resistance between $17.5 and $18, and since the stock wasn't able to cross it, people sold the stock. It may very well come down to test the ascending trendline at $15.51 or the 50 days SMA at $15.06, it will remain technically bullish anyway.
Fundamentally I see the stock as very attractive, as one can see on my current estimates and valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
I'll keep holding NVTL as I wait for the 2007 full year guidance.
NVTL has made a small jump after hours. :D
Someone bought 1000 @ 17.65
Quote from: Houlahan on April 26, 2007, 06:02:21 PM
NVTL has made a small jump after hours. :D
Yes, but it closed down 0.17% to $17.02. I guess this activity has to do with SWIR's numbers that were released after the close and were better than expected (SWIR is a NVTL's competitor).
NVTL is a much more attractive stock than SWIR in my opinion. Let's take this 1st quarter as an example:
- SWIR had revenue of $85.4 M. NVTL already said its revenues will be "more than $100 M" for the quarter;
- SWIR had EPS of $0.20 (above expectations of $0.12). NVTL already gave guidance for "more than $0.35 EPS".
- SWIR market cap is $495 M (if we consider the 14.8% jump in after hours), and NVTL's market cap is $515.83 M
Clearly NVTL is way undervalued when compared to SWIR. Another thing I enjoyed reading SWIR's results was the following:
«"During the first quarter, we experienced strong sales growth, achieving record quarterly revenue of $85.4�million
in what is often a seasonally soft period.»
If Q1 is a seasonally soft period for SWIR, it is also a seasonally soft period for NVTL, and that means things will probably even get better after the blockbuster Q1 results.
NVTL's Q1 results and 2007 guidance will be out next Tuesday, so we'll soon find out. I'll keep on holding NVTL.
It's interesting how investors sold SWIR after the extremely high open and bought NVTL:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36330;image)
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36331;image)
This happened because, as we've discussed over the previous update, NVTL is far more attractive than SWIR at this juncture. This SWIR issue has lead me to study NVTL's seasonality patterns, and indeed, Q1 is usually the weakest quarter for the company. And they're about to report $100 M revenue and $0.35 EPS in Q1. Given this information you can clearly see that analysts expectations are still way below probable reality:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36332;image)
I expect another big gap up on Wednesday after the company releases Q1 results and full year 2007 guidance. I'll probably also have to also raise my long term estimates.
I'll keep holding NVTL.
I see a little selling today. I expect to see more selling tomorrow before reports are released. Do you think that is true?
Then we should see a gap up on wednesday, as David said. I expect a good report, tomorrow. I just hope the market likes the report.
QuoteI see a little selling today. I expect to see more selling tomorrow before reports are released. Do you think that is true?
I don't know Houlahan, I wouldn't try to predict what will happen on the day before of a big news event, I would be more interested in predicting what happens after the news release, because no doubt if there's a big move it will happen on Wednesday, not tomorrow.
QuoteThen we should see a gap up on Wednesday, as David said. I expect a good report, tomorrow. I just hope the market likes the report.
If the report is positive, the market will like it, if it is negative, it will dislike it. All eyes will be on 2007 full year guidance, in terms of revenues and especially EPS. Currently 2007 revenue and EPS expectations point to full year revenue of $365.85 M and EPS of $0.64.
These expectations seem extremely conservative to me, and I expect the company to provide much higher guidance tomorrow. I expect it to say it will earn at least $1 EPS in 2007, if not more. $0.64 is absolutely ridiculous in my view.
Well, we'll soon find out. There were more positive news and comments out today:
• Bell Canada Enhances Mobile Data Network Access Speeds (http://biz.yahoo.com/bw/070430/20070430005423.html?.v=1)
Business Wire (Mon 8:00am)
And a few comments from Zacks:
«Novatel Wireless (Nasdaq: NVTL) recently raised its first-quarter guidance. The company is experiencing strong demand from for its wireless products and accelerated some orders slated for the second quarter into the first quarter. Three of the 11 covering brokerage analysts revised their forecasts following the new guidance, pushing the consensus earnings estimate up six cents to 27 cents per share. The Most Recent Consensus is more bullish at 29 cents per share. It should be noted that two months ago, the first-quarter consensus estimate called profits of just four cents per share. NVTL has exceeded expectations during three out of the past four quarters, though third-quarter profits were two cents below expectations. Novatel Wireless is scheduled to report on Tuesday, May 1, after the close of trading.»
The news I've been waiting for will be released tomorrow after the close. The trading plan is to keep on holding NVTL.
just for the record:
NVTL: To Release Q1 Results May 01 [AMC]
Tuesday , May 01, 2007 08:30ET
Novatel Wireless Inc (Nasdaq NM: NVTL) is scheduled to release its Q1 financial results on May 01, 2007, after the close of the market (AMC).
CONSENSUS ESTIMATES:
Q1 Revenue: $101.83 million
Q1 EPS: $0.35 per share
PREVIOUS PERIOD:
Prev Q1 Revenue: $40.16 million
Prev Q1 EPS: $-0.02 per share
Well, here we go again.
http://biz.yahoo.com/bw/070501/20070501006486.html?.v=1
Tomorrow will be interesting.
Share based compensation is killing the bottom line at 6 cents per quarter EPS. So, 1.00-.24 = $0.76 GAAP for fy07. That means that NVTL is trading at a forward PE of 26 based on the AH bid at $19.90.
Not bad, but not what we were expecting here. If there is a gap up tomorrow, it will be hard not to sell.
The company filed an annual meeting shareholder vote proxy today. Notice the request for even more employee compensation shares (2,200,000). Just another example of corporate management greed.
http://www.sec.gov/Archives/edgar/data/1022652/000119312507096267/ddef14a.htm
That would put the Value of NVTL at $21 .77 for the year next quarter down from this quarter.
Hmmm
I listened to the Earnings Conference Call good questions and answers ;D
What I knew that they would have a 36% growth from quarter to quarter and they'll have almost 1.05 per share for 2007 :)
looks interesting
Thanks Garoh---Did they provide GAAP guidance or discuss employee stock compensation?
Quote from: buddjas1 on May 01, 2007, 05:32:36 PM
Thanks Garoh---Did they provide GAAP guidance or discuss employee stock compensation?
Yes buddjas1
they expect second-quarter non-GAAP earnings of 20 cents to 22 cents a share and revenue of about $90 million ...
I think they can make $1.20 this year easily
That's non-GAAP, garoh--did they mention GAAP earnings?
I listened to parts of the CC as well and didn't hear any discussion of GAAP or share based compensation.
Buddjas how do you figure -.06 per quarter based on one quarter of compensation? Excuse my ignorance if this is a stupid question.
Thanks.
There's something wrong with the conference call replay, I can't hear it after minute 10 or so, can you?
Anyway, the press release has material for me to make some revisions to my long term valuation model.
1) The share count on a fully diluted basis increased 2.43% over the last 12 months. I'm going to revise my 1.02 dilution factor to 1.0243, not significant. The balance sheet remains strong, with a current ratio of 2.7 and cash and equivalents of about $80 M.
(the conference call started again, after a 15 minute or so interruption)
2) Revenue increased 173.5% in Q1 2007 when compared to Q1 2006. Given the company's guidance of $385 M in revenue for 2007 (which they say is a measured guidance - with room for upside, as they have been raising guidance every couple of months), 2007 revenue growth will be 76.6%.
Given this my 30% revenue CAGR estimate is way too conservative. Let me revise this upward to 50%.
3) Net profit margin in Q1 2007 was 9.2%. If they make $1 EPS (GAAP) in 2007, it means they're looking at about $30.5 M net income, which on $385 M revenue means 7.9% net profit margin. I'll revise my net profit margin estimate down from 12% to 8%.
4) As usual I'll use the industry average for my EPS multiple estimate. In the Business Software & Services the average earnings multiple is 27.27 (http://finance.yahoo.com/q/co?s=NVTL).
Here are the valuation model results:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36406;image)
Expectations were lowered a bit, especially because of the net margin estimate contraction from 12% to 8%. The stock is still attractive, with an estimated share price CAGR of 38.18% and an optimal selling price of $31.62.
QuoteThe company filed an annual meeting shareholder vote proxy today. Notice the request for even more employee compensation shares (2,200,000). Just another example of corporate management greed.
I guess that's because management almost has no shares of the company, which is weird. It seems they'll get their shares from diluting shareholder's value, which is the way it usually happens these days.
The hope on NVTL is that they'll keep raising guidance as they have been doing lately. I guess they're being somewhat conservative, not considering there will be growth in Q3 and Q4. In the conference call they talked about $385 M revenue and $1.05 EPS (non GAAP) almost as "cash in the pocket", so there's obviously upside to this number.
Probably the stock will retreat after tomorrow's gap up, but for as long as I consider it fundamentally attractive, I'll refuse to take short term profits to try to buy back the stock lower, since I could lose my position and with it the "certainty" of a large profit. I'll keep holding NVTL.
The MACD is crossing over into positive territory, and NVTL is above the 10,20,30 & 50-day moving averages.
NVTL has almost no resistance now until about $22.50 Sell Target for now.
Many shorts that refuse to cover and many of the analysts who have $15-$21 targets on the stock (pre-earnings), and will have to raise those.
Will see what happens tomorrow.
Buy the way take a look at WFR down $12 last few days. looks like it hit bottom today at $52. Strong growth. :-*
Quote from: ygtrdr on May 01, 2007, 06:35:42 PM
Buddjas how do you figure -.06 per quarter based on one quarter of compensation? Excuse my ignorance if this is a stupid question.
Thanks.
Because that's the only data point that I have and the company suggested that share based compensation would continue in the future. The actual effect could be more but could be less. My point is that you cannot ignore it.
David, how do you figure $1.00 GAAP for the fy07, when the company just told us that "Non-GAAP Earnings Per Share, Diluted $1.00 - $1.05"?? You must either be (a) ignoring share based compensation or (b) expecting NVTL to exceed drastically its own guidance.
If you were to use $0.80 GAAP for fy07, what would your chart say?
Quote from: buddjas1 on May 02, 2007, 08:28:00 AM
David, how do you figure $1.00 GAAP for the fy07, when the company just told us that "Non-GAAP Earnings Per Share, Diluted $1.00 - $1.05"?? You must either be (a) ignoring share based compensation or (b) expecting NVTL to exceed drastically its own guidance.
If you were to use $0.80 GAAP for fy07, what would your chart say?
It's the b) option:
Quote(b) expecting NVTL to exceed drastically its own guidance.
They're not considering any growth in the second half, and I'm pretty positive there will be strong growth, because I know the company's products and how demand for them is just starting to grow.
QuoteIf you were to use $0.80 GAAP for fy07, what would your chart say?
EPS estimate is not a variable of the valuation model, so I can't do that. Ah, ok, you want me to lower the net profit margin, considering just $0.8 EPS on a GAAP basis, right?
Ok, $0.8 EPS would mean about $24.4 M in net income for the full year of 2007, which would translate to 6.33% net profit margin given the $385 M revenue guidance. Let me change the Net Profit margin estimate from 8% to 6.3%, and we get this:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36427;image)
The optimal selling price would decline to $24.9, still attractive.
But I don't think it is reasonable to expect NVTL to have $385 M in revenues in full year 2007, when the company already had $110 M in Q1. And I also don't think it is reasonable to expect GAAP EPS of $0.80 when the company already made $0.34 in Q1. That would be assuming revenues and profits would shrink throughout the year, and I believe the strong growth the company has been experiencing will continue or even accelerate.
This is why I'll keep holding NVTL, despite assuming there can be a short term pullback, because maybe the stock is overbought now - but my investment method ignores overbought/oversold conditions, it prefers to let the trend be my friend.
Thanks :)
Quote from: David Randolph on May 02, 2007, 08:42:24 AM
But I don't think it is reasonable to expect NVTL to have $385 M in revenues in full year 2007, when the company already had $110 M in Q1. And I also don't think it is reasonable to expect GAAP EPS of $0.80 when the company already made $0.34 in Q1. That would be assuming revenues and profits would shrink throughout the year, and I believe the strong growth the company has been experiencing will continue or even accelerate.
I am not
assuming anything because the company already told us that would happen, at least for Q2: "Non-GAAP Earnings Per Share, Diluted $0.20 - $0.22." Translated to GAAP, that is probably in the $0.14-$0.18 range.
In any event, thanks for the pick David (applaud). I sold at 19.38 for a nice gain.
QuoteI am not assuming anything because the company already told us that would happen, at least for Q2: "Non-GAAP Earnings Per Share, Diluted $0.20 - $0.22." Translated to GAAP, that is probably in the $0.14-$0.18 range.
Yes, but for the second half the company is projecting flat to slightly down sales, which I don't think is reasonable. They're essentially giving us the worst case scenario so they can raise guidance some more times and then beat their own guidance, just like it happened now.
Look at the guidance they gave on February 27th, 2007, for Q1, with more than half of the quarter already gone:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36429;image)
And then the guidance they gave on March 26, just one month later, 4 days before the close of the quarter:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36430;image)
And the actual results yesterday:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36431;image)
They're way too conservative when issuing guidance, expect them to raise estimates going forward.
QuoteIn any event, thanks for the pick David (applaud). I sold at 19.38 for a nice gain.
Yep, nice profit, but I expect more over the medium term. You've been "lucky" with your selling actions lately (example SILC), but someday, maybe today, you'll regret you took your profit, as the stock will continue to climb beyond your selling price.
Anyway, nice 30% plus profit, congrats :)
Quote from: David Randolph on May 02, 2007, 09:59:32 AM
QuoteIn any event, thanks for the pick David (applaud). I sold at 19.38 for a nice gain.
Yep, nice profit, but I expect more over the medium term. You've been "lucky" with your selling actions lately (example SILC), but someday, maybe today, you'll regret you took your profit, as the stock will continue to climb beyond your selling price.
Anyway, nice 30% plus profit, congrats :)
Thanks. I just make a decision when I see new data. That's not "luck." Rather, it is analysis. In this case, there are stocks out there with a better upside.
QuoteThanks. I just make a decision when I see new data. That's not "luck." Rather, it is analysis. In this case, there are stocks out there with a better upside.
Sure, in lack of a better word, I put "" around the word luck. No doubt it is analysis. Short term fundamental analysis. Good work buddjas1 :)
I'm thinking I should go back to the analysis on demand, 3 per day method of selecting new stocks to cover. The current way I just start looking at too many without being able to decide on which ones I should make a more in depth analysis. I'm interested in knowing your stocks "with a better upside".
Are we talking IEAM here? I've been studying it everyday, it seems so attractive, from what we've heard at that conference the CEO gave and the move to the Nasdaq (indeed, it happened, it makes me want to believe). Why isn't it going up? It's so strange, volume is drying.
I wonder if it is the difference between EBITDA and EPS on a fully diluted basis. When the CEO said "these non cash charges will go away in Q3", I mean, by how much are the non cash charges impacting the EPS? Should we expect dilution from conversion of something? Do you know? Thanks buddjas1, I'm interested in IEAM.
Quote from: buddjas1 on May 02, 2007, 10:12:09 AM
Quote from: David Randolph on May 02, 2007, 09:59:32 AM
QuoteIn any event, thanks for the pick David (applaud). I sold at 19.38 for a nice gain.
Yep, nice profit, but I expect more over the medium term. You've been "lucky" with your selling actions lately (example SILC), but someday, maybe today, you'll regret you took your profit, as the stock will continue to climb beyond your selling price.
Anyway, nice 30% plus profit, congrats :)
Thanks. I just make a decision when I see new data. That's not "luck." Rather, it is analysis. In this case, there are stocks out there with a better upside.
Like what my friend... I need a couple new winners. ;)
I've done the same as you and I am only now holding 6 stocks from the main portfolio. GIGM, ALDN, TZOO, NVTL (sold 4%. holding 4%, because like David I see some upside still in this stock. I just wanted to lock away some profits just in case.), CIMT, MSI.
Quote from: dragonamg on May 02, 2007, 10:38:12 AM
Like what my friend... I need a couple new winners. ;)
I've done the same as you and I am only now holding 6 stocks from the main portfolio. GIGM, ALDN, TZOO, NVTL (sold 4%. holding 4%, because like David I see some upside still in this stock. I just wanted to lock away some profits just in case.), CIMT, MSI.
I hold only IEAM, MSI, and CIMT now. I do like GIGM and may pick that up with the NVTL proceeds.
I am always searching for better stocks.
VPHM results were very strong, the stock is pushing higher by 7% on volume above average. I know la-onda holds this one :). I probably should revise upward my estimates for VPHM.
NVTL up 6% to $19.8. I told you you would run out of "luck" buddjas1. I'm defining luck here by: "take profits in a bull trend, trying to catch a top, due to a slight fundamental miss of your own expectations, not the market expectations".
You can blame me of making that same exact "mistake" all too often. Why do I think it is a mistake?
Well, if you cover hundreds of stocks like I've been doing (you too, I know), you get to notice that all stocks that make, say, a 500% move, all of them, have some weak quarters in between, fundamentals never come out linear and perfect. I guess one needs to judge fundamentals, like in technical analysis, by the trend, and not one or two data inputs. Investing more from a business perspective.
Just trying to learn here, good luck :)
Ah, by the way, you didn't comment on IEAM, like I said, the story seems great, but is there any flaw in it? The market behavior doesn't add up to the fundamental story. Any thoughts? Thanks.
Here is a good article to address short-term volatility:
http://www.fool.com/investing/small-cap/2007/05/01/how-to-prevent-a-25-drop.aspx?source=mptoppromo
The "secret" is: just don't look at your stocks so often >:D
Quote from: David Randolph on May 02, 2007, 12:13:50 PM
Well, if you cover hundreds of stocks like I've been doing (you too, I know), you get to notice that all stocks that make, say, a 500% move, all of them, have some weak quarters in between, fundamentals never come out linear and perfect. I guess one needs to judge fundamentals, like in technical analysis, by the trend, and not one or two data inputs. Investing more from a business perspective.
Quote from: David Randolph on May 02, 2007, 12:13:50 PM
Well, if you cover hundreds of stocks like I've been doing (you too, I know), you get to notice that all stocks that make, say, a 500% move, all of them, have some weak quarters in between, fundamentals never come out linear and perfect. I guess one needs to judge fundamentals, like in technical analysis, by the trend, and not one or two data inputs. Investing more from a business perspective.
The only difference between your analysis and mine, regarding NVTL, was that I took management's guidance for the full FY07 literally (non-GAAP $1.00). If that guidance is true (as I think it is), NVTL's upside is very limited. You have chosen to disregard the guidance (perhaps for good reason); I did not. I did not use "short-term" analysis here.
Quote from: David Randolph on May 02, 2007, 10:25:35 AM
[Are we talking IEAM here? I've been studying it everyday, it seems so attractive, from what we've heard at that conference the CEO gave and the move to the Nasdaq (indeed, it happened, it makes me want to believe). Why isn't it going up? It's so strange, volume is drying.
I wonder if it is the difference between EBITDA and EPS on a fully diluted basis. When the CEO said "these non cash charges will go away in Q3", I mean, by how much are the non cash charges impacting the EPS? Should we expect dilution from conversion of something? Do you know? Thanks buddjas1, I'm interested in IEAM.
My full analysis on IEAM is here:
http://www.3stocksonfire.org/trading/index.php?topic=5889.msg93578#msg93578
Last quarter, the non-cash charges took EPS from $0.164 to ($0.19).
I do not expect dilution as there are only a limited number of warrants still outstanding and the company is repurchasing them pursuant to the $1,000,000 stock repurchase program.
Why is IEAM not going up? Well, as you would say David, why pay attention to short term noise when the long term is so attractive?
You use good logic, buddjas1, and you're firm in your decisions. This is good. Applaud.
However, even judging by the public's reaction to earnings on NVTL, I am simply reluctant to sell at the moment. It may correct a bit, I agree with David on this one, but I am just stubborn to let go for no good cause. I am even continuing to hold JASO, only for a technical reason at the moment having a stop loss at a comfortable level.
NVTL has a growing business and not having an alternative now, I see no reason to abandon this trade.
QuoteThe only difference between your analysis and mine, regarding NVTL, was that I took management's guidance for the full FY07 literally (non-GAAP $1.00). If that guidance is true (as I think it is), NVTL's upside is very limited. You have chosen to disregard the guidance (perhaps for good reason); I did not. I did not use "short-term" analysis here.
Exactly, very well explained buddjas1. I've disregarded the guidance, because if I took it seriously in the past I would have not bought NVTL at $14.53 and I wouldn't have a 37% profit now, since they keep giving us unrealistically low guidance to then raise it later, as I've shown in a previous post today. So, my holding of NVTL is based on "numbers will be better than what even the company expects." That has been the trend lately. Time will tell.
There's an interesting article from thestreet.com about SWIR and NVTL:
Modem Makers Tap Into Hunger for Wireless Web Access (http://www.smartmoney.com/Techsmart/index.cfm?story=20070502&afl=yahoo&pgnum=1)
Instead of buying relative strength, like I've done on NVTL (thanks to a realcoolhead tip, thanks :)), the author claims SWIR is more attractive than NVTL because it rose less this year. But simple math shows NVTL is still more attractive than SWIR, here's why:
- SWIR had EPS of $0.2 in Q1 2007, and it closed today at $17.81.
- NVTL had EPS of $0.34 in Q1 2007, and closed today at $19.94.
So, SWIR is trading at 89 times Q1 EPS and NVTL is trading at 58.6 times. Which one is more attractive? NVTL, of course. If NVTL were to trade at the same multiple as its main competitor, it would then be trading at $30.28.
Maybe that's where we're going. I'll keep holding NVTL.
QuoteWhy is IEAM not going up? Well, as you would say David, why pay attention to short term noise when the long term is so attractive?
Absolutely, good point buddjas1. Probably people selling IEAM now don't have a clue about the future, they have weak hands. I just read the company's latest 10-K again. That balance sheet is pretty weak, isn't it? And they like to issue shares for cash:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=36453;image)
It's somewhat strange that they claim to be buying back so many shares now when just 5 months ago they were issuing shares for cash. But it's not impossible.
I guess you're probably right, but you're buying because of a future catalyst: "earnings will be positive when these non cash charges and interest payments end" (they claim to have a strange accounting for warrants outstanding and that is what is hurting the bottom line). In this case I think I'll wait for the catalyst, even if I pay more for my shares. Something smells fishy here. Good luck man.
Did I write about NVTL? I guess so, I'll keep holding the stock.
as always David ;):
NVTL: Dundee Ups to Outperform from Neutral; Ups Tgt to $22 vs $18
Wednesday, May 02, 2007 10:32ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm: Dundee Securities Corporation
Ratings Action: UPGRADE
Current Rating: Outperform (from Neutral)
Target Price Action: INCREASE
Target Price: $22.00 (+22.22% from $18.00)
&
Novatel Wireless "buy," target price raised
Wednesday, May 02, 2007 7:50:26 AM ET
Montgomery & Co
NEW YORK, May 2 (newratings.com) - Analysts at Montogomery & Co reiterate their "buy" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company.
The target price has been raised from $21 to $24.
In a research note published this morning, the analysts mention that the company has reported robust 1Q07 results, with revenues and pro forma EPS ahead of the estimates and the consensus. The revenue upside was driven by higher-than-anticipated shipments of Ovation and PC/Express card, the analysts say. The EPS estimates for 2007 and 2008 have been raised from $0.87 to $1.05 and from $0.97 and $1.25, respectively.
Quote from: David Randolph on May 02, 2007, 05:56:01 PM
I guess you're probably right, but you're buying because of a future catalyst: "earnings will be positive when these non cash charges and interest payments end" (they claim to have a strange accounting for warrants outstanding and that is what is hurting the bottom line).
Well, we all buy stocks because of the future catalysts, right? Anyway, the CEO told us that those non-cash charges "will all be gone by June 30." See http://www.wsw.com/webcast/brileyco8/ieam.ob/ at the 14m35sec mark. That means that the 10Q for Q1fy08 on Oct. 15, 2007, will be free non-cash derivative charges. I have no trouble accumulating shares at $6 until then; knowing that the EPS on a GAAP basis will over 50 cents for the quarter.
Quote
And they like to issue shares for cash:
It's somewhat strange that they claim to be buying back so many shares now when just 5 months ago they were issuing shares for cash. But it's not impossible.
That is how IEAM financed the acquisition of PittPenn. If they did not, I would not be writing this right now. Have to spend money to make money. Now that PittPenn is generating $$$, IEAM is buying back up to $10,000,000 of the shares. Management is really quite good and, now that IEAM has a revenue producer in PittPen, anti-diluting the stock. Moreover, the CEO stated that IEAM has no need for capital during the next two years. 21min 11sec mark.
You are looking for something "fishy" here and that's fine. However, would the CEO keep buying shares (many many shares) just to play a trick on you? Further, the people at NASDAQ just spent 9 months reviewing IEAM's financials (not an easy process). If there was something "fishy," then NASDAQ would have caught it.
IEAM CEO is well known and respected guy. Long since $5.80
Quote from: yukiii on May 02, 2007, 11:29:00 PM
IEAM CEO is well known and respected guy. Long since $5.80
Really? What do you know about him?
Quote from: buddjas1 on May 03, 2007, 11:12:11 AM
Quote from: yukiii on May 02, 2007, 11:29:00 PM
IEAM CEO is well known and respected guy. Long since $5.80
Really? What do you know about him?
Hi buddjas1. I'm also curious about yukiii's response to this. Today I read some more stuff about IEAM. Don't judge me wrong, I want to buy the stock. Tell me one thing if you please, the CEO said Q2 or Q3 for the non cash charges to be gone?
There's some concern about internal controls that were expressed by auditors. Isn't it strange that they account convertible debentures as interest expense? That's what they're doing right? Yes, perhaps I'm starting to understand, for as long as they have convertible warrants & debentures outstanding they're accounting them as interest expense, so when all warrants are converted (just 2 million or so to go, right?) the EBITDA will almost all be net income, am I'm right?
Ooops, too many questions, sorry.
Hi David,
??? probably I don´t understand again.
By EU standards for financial reporting (IFRS):
EBITDA = operating profit/loss before tax + depreciations of fixed assets
Net Income = operating profit/loss + financial profit/loss - income tax
Interests expenses/incomes are in financial profit already, not in operating, and so interests incomes or losses don´t impact to EBITDA never.
Are US standards US GAAP another?
I think, it is right to book interest expenses into financial profit/loss. They should have importance to cash flow and net income, not for EBITDA.
May be, you was writting about something other and I could make chaos, please watch out my notes.
Quote from: David Randolph on May 03, 2007, 12:33:57 PM
Tell me one thing if you please, the CEO said Q2 or Q3 for the non cash charges to be gone?
The CEO said that non-cash charges will be gone by June 30, 2007. IEAM's fiscal year 2008 starts July 1. So, today (May 3, 2007), IEAM is in Q4FY07. I assume, therefore, that Q1 of FY08, which ends Sept. 30, 2007, will not have the non-cash charges. November 15, 2007, may be the day that IEAM starts to run.
QuoteInterests expenses/incomes are in financial profit already, not in operating, and so interests incomes or losses don´t impact to EBITDA never.
Are US standards US GAAP another?
I think, it is right to book interest expenses into financial profit/loss. They should have importance to cash flow and net income, not for EBITDA.
Yes, interest income/expense doesn't impact EBITDA. What I wrote was:
Quoteso when all warrants are converted (just 2 million or so to go, right?) the EBITDA will almost all be net income, am I'm right?
What I meant to say was: "since interest expense will start being close to zero (the company says it is just about $200 K per quarter), Net Income will be similar to EBITDA"
QuoteThe CEO said that non-cash charges will be gone by June 30, 2007. IEAM's fiscal year 2008 starts July 1. So, today (May 3, 2007), IEAM is in Q4FY07. I assume, therefore, that Q1 of FY08, which ends Sept. 30, 2007, will not have the non-cash charges. November 15, 2007, may be the day that IEAM starts to run.
Thanks buddjas1, it can be a somewhat long wait, that's why I talked about the "future catalyst" issue. You know how I've been burned before because of buying way before a future catalyst, like it happened in DIET for example. But IEAM is definitely worth keeping a close eye on. Good luck :)
Quote from: David Randolph on May 03, 2007, 02:03:31 PM
Thanks buddjas1, it can be a somewhat long wait, that's why I talked about the "future catalyst" issue. You know how I've been burned before because of buying way before a future catalyst, like it happened in DIET for example. But IEAM is definitely worth keeping a close eye on. Good luck :)
I understand, but you run the risk that the market discovers IEAM (like Pike Capital did) before you buy. I bet that we'll see a significant jump when IEAM posts $25 million in revenue for Q3 on May 15.
Quote from: buddjas1 on May 03, 2007, 11:12:11 AM
Quote from: yukiii on May 02, 2007, 11:29:00 PM
IEAM CEO is well known and respected guy. Long since $5.80
Really? What do you know about him?
John Mazzuto CEO of ILNP came from humble beginnings. He was born in Newark and grew up in East Orange, N.J., to an Italian immigrant mother and father born of Italian immigrants. Both were teachers, and Mazzuto attended Tabor Academy prep school on a scholarship, as well as Yale University, where he graduated in 1970 with a B.A. in history. Mazzuto also was an athlete, playing varsity baseball at Yale.
He's still close with his best friend on the team, Steve Greenberg, who went on to be president of Major League Baseball. His coach, Kenneth McKenzie, instantly remembers coaching "Jody" Mazzuto. "He was a shortstop, bats right, throws right," said McKenzie, one of the original New York Mets. "I remember one play when he fielded a ball and threw wide to first base. He hit the umpire right in the rear. That kept it from being a two base error."
"I had an erratic arm," Mazzuto explained.
If Mazzuto's aim wasn't always sharp, his head for finance has been. Chemical Bank hired Mazzuto straight out of Yale in 1971, and promoted him to Vice President by 1980. He became manager of a Chemical Bank business unit overseeing energy customers in 1981, and was managing director of corporate finance from 1985 to 1989.
In that role, he oversaw billion-dollar financing deals with corporate giants like Kaiser Aluminum. He also helped other Chemical clients with major debt restructuring deals. Mazzuto did quite well for himself as an investment banker at Chemical because of commissions on the deals he worked. So well in fact, rumor has it that he left because it became politically incorrect for an employee to make more than the chairman.
Mazzuto laughs at the story, saying it's more accurate that he left Chemical because "I was offered a contract I couldn't refuse by Asian Oceanic Group, a merchant banking firm . I was making a lot of money at Chemical - more than I ever dreamed and Asian Oceanic doubled the ante for a two-year deal". He headed the New York corporate finance operation and later became president of the New York subsidiary.
After leaving Asian Oceanic, Mazzuto became a legendary entrepreneur who made his fortune owning companies in the fields of insurance, textiles and computer software to name a few.
IEAM
aha ,OK, :o, thanks David
and 200K just now only?
Income Statement on yahoo.com
PERIOD ENDING 31-Dec-06 30-Sep-06 30-Jun-06 31-Mar-06
Interest Expense 4,096 1,830 1,742 2,242 thousands
Net Income (2,042) 986 216 (7,267)
May be, he has meant really callendar Q2 or Q3 2007.
Quote from: buddjas1 on May 03, 2007, 02:23:41 PM
[keeping a close eye on. Good luck :)
I understand, but you run the risk that the market discovers IEAM (like Pike Capital did) before you buy. I bet that we'll see a significant jump when IEAM posts $25 million in revenue for Q3 on May 15.
[/quote]
hi,
there can be no risk in not buying . that is just fear of missing out talking. you can never miss out .
there is always another opportunity in the market . always.
maxi
ok guys let´s do our IEAM analysis on the IEAM board; I am a IEAM long term investor so don´t misunderstand me ;):
IEAM thread:
http://www.3stocksonfire.org/trading/index.php?topic=5889.150
Back to NVTL:
some insider selling:
http://www.secform4.com/insider-trading/1022652.htm
news update:
SkyCross Supplies Antenna for the Samsung BlackJack Smartphone
Thursday , May 03, 2007 14:28ET
SkyCross, a global wireless company providing antenna-centric RF solutions, announced that the Samsung BlackJack smartphone contains a SkyCross antenna.
SkyCross said that the BlackJack is one of many devices to use a SkyCross antenna to support next-generation services. Additional devices include the Novatel Wireless cards offered by Sprint and Verizon Wireless, as well as several Samsung and Pantech handsets marketed in Korea. "Customers recognize when a device offers the best in style and performance," said Dr. Chris Morton, CEO of SkyCross. "SkyCross works closely with device manufacturers to ensure that the overall RF system, including signal reception and battery life, is optimized all while offering an attractive exterior. We are happy to be part of another successful Samsung project."
Thanks for the information la-onda. That 15,000 shares sale by Slim Souissi isn't significant in my view.
I expect NVTL to raise or beat its internal guidance going forward. I'll keep holding NVTL, still cheap.
Ah NVTL, such a sure thing in my view. The company gave a "no growth" guidance and still the stock is attractive, look how it is being held up so high. This is because they previously gave this type of guidance and then they had to revise it upwards, two times in a row for the first quarter alone.
Do you have mobile internet in your computer? Do you want it, so you can take your computer from house to house, town to town, always with internet? I'm sure everybody wants mobile internet, but just 5% or so already have it. In fact, people want it so much that laptop manufacturers are starting to provide the cards needed to have mobile connectivity (http://www.novatelwireless.com/) (pay attention because it is different from wireless) embedded with their computers.
NVTL is beating SWIR on their competitive battle. This is obvious from sales volumes and profit margins.
I'm not saying that NVTL will never be below $19 or $18 again. In fact, it would be perfectly natural for it to have a correction to the 50 days SMA, currently at $16. But it may also just continue to move up towards $30. In my view, the latter is the highest probability scenario, because the technical trend is bullish and there's only upside to the fundamental background.
I'll keep holding NVTL.
NVTL closed above $20 for the first time since late 2004, but fundamentals are much more attractive now than what they were back then. In 2004 revenues were $103 M which compares to $385 M expected for 2007. EPS was $0.48 in 2004 and for 2007 we'll most likely get at least $1 EPS. So, if NVTL were to be valued the same way it was valued in 2004, the stock would now be north of $40.
On my valuation model I have just 50% revenue CAGR expected (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main) for the next three years, but revenue growth in 2007 is expected to be at least 77%. Anyway, probably the growth rate will slow down in 2008 (analysts are expecting just 15% growth in 2008).
Unexpectedly for some people, NVTL continues to rise and I'll continue holding the stock.
NVTL will participate in a Piper Jaffray conference tomorrow:
• Novatel Wireless to Present at the Piper Jaffray Semiconductor and Communications Conference (http://biz.yahoo.com/bw/070507/20070507005381.html?.v=1)
Business Wire (Mon 8:30am)
I'm not sure I'll be near a computer at 10:10, so if one or more of you could listen to the conference and post a few highlights here it would be great. I wish there will be a replay available, but there's no indication of it.
The CFO sold some shares yesterday (http://www.sec.gov/Archives/edgar/data/1022652/000137982807000048/xslF345X02/edgardoc.xml), but we already learned we shouldn't give much weight to insider's selling, since almost all of the times the selling is not linked to the company's financial performance, but much more linked to the insider's personal needs or desires.
Technically the stock continues to consolidate recent gains. I'll keep on holding NVTL.
QuoteI'm not sure I'll be near a computer at 10:10, so if one or more of you could listen to the conference and post a few highlights here it would be great. I wish there will be a replay available, but there's no indication of it.
It seems nobody was able to post the highlights, but I found a link to the archived webcast (http://www.corporate-ir.net/ireye/conflobby.zhtml?ticker=NVTL&item_id=1530060).
It's a pity I couldn't find the slides, perhaps La-onda has them, he always gets those :D
Well, they didn't say anything new, here are the notes I took from the conference:
- Express cards accounted for $50 M of Q1 revenue, compared to $24 M in the previous quarter;
- They have 30 patents and 20 patents pending;
- 46% of revenue in Q1 was non PC products;
- They have cash of $3 per share ($91 M) and $61 M of top rated receivables, because their main clients are Sprint, Verizon, Dell, Sony, Vodafone, etc;
- They recently issued their first full year guidance because they have much better visibility now;
- In terms of "modems" going with the PC's (I believe they mean a peripheral that allows for mobile internet), in 2006 there were 6.2 million, a few months ago they were looking at 8.3 million in 2007 but now they see 9 million "modems" embedded with new PC sales (PC sales worldwide are expected to be 65 million units in 2007);
- As clients they have 11 carriers ( the main are Sprint, Verizon, Vodafone, T-Mobile, Telefonica), 9 OEMs (here they have Dell, Sony, Panasonic, Toshiba, etc) and they currently sell in 38 countries;
- They have WiMax on their roadmap;
- "Modems" embedded with PC's are growing at a 492% CAGR. In 2007 9 million of 65 million new PC's are expected to have a mobile internet solution embedded. They're very excited about growth in this embedded market, as well as sales for existing PC's (for example, I bought one of their products for my old laptop);
- They have 50% of the US market;
- They're also excited about their new "Ovation" product, which is a Fixed/Mobile convergence product. Basically it works like this: you get one of those "Ovation" products, get into a room and get all computers connected between themselves and the internet, fixed or mobile. Not sure if I understood it right, but it seems like a true innovation;
This is what I got. I have nothing to change to the estimates I have on my valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main) for now, but I'm pretty sure they'll raise guidance or beat their own internal estimates by a wide margin. I'll continue holding NVTL.
David,
Wireless business as a lot of room to grow, have you considered to analyse Verizon (VZ) ?
Quote from: Dracull on May 10, 2007, 07:52:56 AM
David,
Wireless business as a lot of room to grow, have you considered to analyse Verizon (VZ) ?
Hi Dracull, nice to see you :)
VZ is a $120 B market cap, it's hard for me to consider companies above $10 B market cap, because they're too big and it's rare for them to be able to grow more than 20% a year, so I'm not interested. But thanks :)
NVTL filed its 10-Q for Q1 2007 (http://www.sec.gov/Archives/edgar/data/1022652/000119312507110226/d10q.htm) just after the close. No surprises there.
The general market weakness made investors take profits in NVTL to offset losses elsewhere, but in my view the stock/company is still undervalued, and will move towards $30 over time. I'll continue holding NVTL.
NVTL looks good here at $19.50
http://stockcharts.com/h-sc/ui?s=NVTL&p=D&b=5&g=0&id=p44494122738
Quote from: yukiii on May 10, 2007, 11:10:52 PM
NVTL looks good here at $19.50
http://stockcharts.com/h-sc/ui?s=NVTL&p=D&b=5&g=0&id=p44494122738
Nice to have you on NVTL's board yukiii. I'm sorry if sometimes I've been too tough on you. Good luck :)
NVTL is high but it should be even higher, because the company is still undervalued, at a $608 M market cap here. I'll continue holding NVTL.
NVTL continues to consolidate the recent gains within a tight range. The stock seems to be waiting for the 50 days SMA or the ascending trendline before jumping towards $30. Anyway, as you can read over this thread, my believe is the company's 2007 guidance is the worst case scenario, there's a lot of upside to the fundamentals and consequentially to the share price.
I'll keep holding NVTL.
Even though NVTL's fundamentals are very attractive (at least in my view), the stock will probably go down to close the gap between $18.72 and $18.9, on what can be defined as a "normal correction process". It doesn't change, at all, my long term outlook of seeing NVTL at $30 sooner rather than later, when the company starts raising its own guidance for the full year 2007.
I'll continue holding NVTL.
QuoteEven though NVTL's fundamentals are very attractive (at least in my view), the stock will probably go down to close the gap between $18.72 and $18.9, on what can be defined as a "normal correction process".
NVTL didn't quite close the gap, since the low of the day was $18.94 and it would need to be $18.72 for the gap to be closed. But it is impossible to know if it will close the gap or not, it is a 50/50 chance game (like most short term predictions), so I'm talking about this issue for entertaining purposes only.
Fundamentally, my long term valuation model says NVTL should only be sold at $30.15 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main), so I'll continue holding the stock.
;D Anybody keeping an eye on NVTL? It's on fire today! Wow!
Do you think it will just go up from here or have a correction?
That gap fill worked wonders for it. Congrats
Quote from: BigSully1 on May 17, 2007, 04:25:02 PM
That gap fill worked wonders for it. Congrats
Actually it never even completely filled it. Just saw David's post.
Looking good here still holding. ::)
QuoteDo you think it will just go up from here or have a correction?
Does it matter? I bought NVTL at $14.53, held through all corrections and I'm still holding, for a 48% gain now. If I had sold because "perhaps there will be a correction here", I would have taken a much smaller profit than what I have now (because I would have to be very lucky to buy it around the lows of the correction, and probably wouldn't chase it higher either, because to be coherent I would think: "I sold because I wanted to buyback lower, so I'm not going to buy back higher now. Better look at other stocks instead, I'm a rational man"). But no, I wouldn't be a rational man, because what a rational man needs to do is to understand the impossibility of forecasting short term fluctuations (by the way, forecast based on what, technical indicators? They just don't work, believe me, I have the best technical analysis software outthere) and focus on long term factors affecting stocks instead.
Well, sorry for all this spiritgate, I wasn't writing for you specifically, I was writing in general, just thinking loud.
Damn it, I almost feel angry about NVTL going up 10% today. My way of feeling bad when I win and good when I lose (to pursuit emotional balance at all times) is growing deeper and deeper.
Therefore, I'll just leave the updated chart and say that I'll keep on holding NVTL, the optimal selling price, considering current fundamental trends, is $30.15 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
Thanks David. I came in to NVTL a little late and was thinking of picking up more. I am so new to all of this that I'm really asking- should I wait for a pullback, just jump in some more, or just forget it and wait for another opportunity with another stock? I hate sounding like such an airhead but I'm only a few months into this whole thing. Yours is the best site I've found so far for active education. I trust your analysis.
Quote from: spiritgate on May 18, 2007, 07:11:39 AM
Thanks David. I came in to NVTL a little late and was thinking of picking up more. I am so new to all of this that I'm really asking- should I wait for a pullback, just jump in some more, or just forget it and wait for another opportunity with another stock? I hate sounding like such an airhead but I'm only a few months into this whole thing. Yours is the best site I've found so far for active education. I trust your analysis.
Thanks spiritgate, I welcome your words, in fact, I was in need of them after being awake all night, doubting that I was making a good job (that's why I have such an headache now ::))
As for your NVTL question, it depends on how much percentage of capital do you have in the stock. If it is more than 10%, I say you should stay put. If it is less than 5%, you should buy more, regardless of the price.
As a money management and simplification rule I always buy 6.66% of capital in each stock, and never average up or down. This way I just worry about what to buy and at what price, but I don't question myself "how much?", or else I would be confronted with endless decisions of "should I buy more now?". So, in the future, my advice for you is to follow my money management strategy of deciding, in advance, how much percentage of total equity are you going to invest in each stock. If it's 10%, for example, you know you have to own 10 different stocks to be full invested - this makes you diversify your investments and not fall in love about one single stock, which would be very prejudicial over the long term.
So, it depends on all this. If I consider NVTL attractive at current prices? Of course, or I wouldn't be holding the stock.
Good luck :)
Thank you David. Im sorry you worry so much. You have a lot of fans at this site and it's great to be learning from a learner. Your humility is one of your greatest strengths. You can rest easy just knowing you are doing the best you can. It's obvious to the rest of us that that is what is true about you.
Anyway, I'm off to buy more NVTL! Thanks for setting me straight about the percentage. I get it now.
Havn't read through the entire thread so it might've been explained. But how can you invest in NVTL and not look at SWIR? SWIR has the overwhelming edge in the growing markets (South and East Asia) and has established solid market share in North America. Explosive growth and improving fundamentals due to management change and good business decisions. Once good quarter for NVTL and everyone is jumping on board for the ride ... four great quarters and a mediocre one for SWIR nobody takes notice?
Quote from: spiritgate on May 18, 2007, 09:38:36 AM
Thank you David. Im sorry you worry so much. You have a lot of fans at this site and it's great to be learning from a learner. Your humility is one of your greatest strengths. You can rest easy just knowing you are doing the best you can. It's obvious to the rest of us that that is what is true about you.
Anyway, I'm off to buy more NVTL! Thanks for setting me straight about the percentage. I get it now.
Thanks for your kind words spiritgate :)
Quote from: dwest718 on May 18, 2007, 10:38:40 PM
Havn't read through the entire thread so it might've been explained. But how can you invest in NVTL and not look at SWIR? SWIR has the overwhelming edge in the growing markets (South and East Asia) and has established solid market share in North America. Explosive growth and improving fundamentals due to management change and good business decisions. Once good quarter for NVTL and everyone is jumping on board for the ride ... four great quarters and a mediocre one for SWIR nobody takes notice?
Hi dwest718. Further back on this thread I've compared NVTL with SWIR and got to the conclusion that NVTL is more attractive. Let me make another quick comparison between the two. Over the past four quarters:
- NVTL had revenue of $286 M, SWIR had revenue of $220 M. NVTL's quarterly average revenue growth was 24.75%, with revenues growing from $45 M in Q1 2006 to $110 M in Q1 2007. SWIR's quarterly growth was just 10.87%, with revenues rising from $45 M in Q1 2006 to $68 M in Q1 2007.
- NVTL's net profit margin is expanding, SWIR's is shrinking. NVTL's net profit margin in Q1 2006 was 0%, and jumped to 9.2% in Q1 2007. SWIR had net profit margin of 4.44% a year ago, it is 2.9% now.
So, NVTL's fundamental improvement is much healthier and stronger than SWIR's. Numbers say NVTL has the competitive edge.
I'll keep holding NVTL.
Not saying NVTL does not deserve to continue to be held :) ... Just saying I think they are both great stocks. I have a bit of a bias as I own a good bit of SWIR and only a few shares of NVTL. I do hold both though... it's been a nice run so far ;D
David, do you have any reaction to the execs at NVTL selling their shares?
S 2007-05-21 2007-05-21 17:27:50 NOVATEL WIRELESS INC NVTL HALVORSON DAN L officer (Chief Financial Officer) 4,883 $21.20 $103,520.00 5,890 view
S 2007-05-18 2007-05-21 17:10:06 NOVATEL WIRELESS INC NVTL LEPARULO PETER V director officer (Executive Chairman) 35,658 $20.99 $748,461.00 12,115 view
S 2007-05-18 2007-05-18 18:21:41 NOVATEL WIRELESS INC NVTL RATCLIFFE CATHERINE F officer (VP Business Affairs) 17,350 $21.01 $364,524.00 4,076 view
S 2007-05-18 2007-05-18 18:20:11 NOVATEL WIRELESS INC NVTL HADLEY ROBERT M officer (SVP Worldwide, Sales & Mktg) 14,650 $20.90 $306,185.00 0 view
S 2007-05-18 2007-05-18 18:15:08 NOVATEL WIRELESS INC NVTL SOUISSI SLIM S officer (SVP & CTO) 15,991 $20.93 $334,692.00 16,020 view
S 2007-05-18 2007-05-18 18:15:08 NOVATEL WIRELESS INC NVTL SOUISSI SLIM S officer (SVP & CTO) 78,667 $20.93 $1,646,500.00 16,020 view
S 2007-05-18 2007-05-18 18:15:08 NOVATEL WIRELESS INC NVTL SOUISSI SLIM S officer (SVP & CTO) 16,000 $20.93 $334,880.00 20 view
S 2007-05-18 2007-05-18 18:09:22 NOVATEL WIRELESS INC NVTL Ross Chris officer (VP Operations) 17,350 $20.96 $363,656.00 4,437 view
S 2007-05-17 2007-05-18 18:05:45 NOVATEL WIRELESS INC NVTL PUDWILL HORST J director 85,000 $21.28 $1,808,800.00 125,032 view
S 2007-05-07 2007-05-08 08:00:06 NOVATEL WIRELESS INC NVTL HALVORSON DAN L officer (Chief Financial Officer) 78,667 $20.13 $1,583,570.00 29,136 view
S 2007-05-07 2007-05-08 08:00:06 NOVATEL WIRELESS INC NVTL HALVORSON DAN L officer (Chief Financial Officer) 14,246 $20.13 $286,772.00 14,890 view
S 2007-05-07 2007-05-08 08:00:05 NOVATEL WIRELESS INC NVTL HALVORSON DAN L officer (Chief Financial Officer) 46,694 $20.13 $939,950.00 29,136 view
S 2007-05-01 2007-05-03 17:38:47 NOVATEL WIRELESS INC NVTL SOUISSI SLIM S officer (SVP & CTO) 7,037 $18.20 $128,073.00 20,137 view
S 2007-05-01 2007-05-03 17:38:47 NOVATEL WIRELESS INC NVTL SOUISSI SLIM S officer (SVP & CTO) 7,963 $18.20 $144,927.00 20,137
According to this information guess the guys that bought in the last 15 mins were
plain fools ??
NVTL will present at a conference tomorrow:
• Novatel Wireless to Present at the Craig-Hallum 4th Annual Institutional Investor Conference (http://biz.yahoo.com/bw/070521/20070521005151.html?.v=1)
Business Wire (Mon 8:30am)
And insiders sold a few shares (they didn't have many, at least for now, but of course, they have outstanding options):
• Novatel VP Sells Shares (http://biz.yahoo.com/ap/070521/novatel_wireless_insider_transactions.html?.v=1)
AP (Mon 10:16am)
There's nothing to worry about insiders selling, it always happens when stocks go up a lot and most of the times it isn't linked with the company's financial performance.
I'll keep holding NVTL, as it keeps rising towards $30.
Nothing new on NVTL, I expect the company to raise Q2 guidance anytime between now and the earnings release, I'll continue holding NVTL.
NVTL continues to consolidate recent gains, I'll keep holding the stock.
NVTL will present at a conference on May 30:
• Novatel Wireless to Present at the Cowen and Company 35th Annual SMid-Cap Technology Conference (http://biz.yahoo.com/bw/070524/20070524005308.html?.v=1)
Business Wire (Thu 8:30am)
The stock tried to push higher early in the day but the general market woes took it down slightly by the end of the session. NVTL's relative strength continues. I expect the company to raise guidance for this quarter or to beat expectations when they announce results, as demand for its products (http://www.novatelwireless.com/) is very hot.
I'll continue holding NVTL.
Reports coming in....autch....I don't know if I have the stomach to hold on my hand trough the earning, I hope so
Quote from: Dracull on May 25, 2007, 05:03:46 AM
Reports coming in....autch....I don't know if I have the stomach to hold on my hand trough the earning, I hope so
What report Dracull? Second quarter earnings will be out just in mid August, relax.
No report, I mean conference...my fault, I didn't read it right.
Quote from: Dracull on May 25, 2007, 05:23:58 AM
No report, I mean conference...my fault, I didn't read it right.
Usually companies don't say anything new at conferences. When they're going to say something materially relevant or different they usually pre-announce it so that everybody pays attention. It would be nice if NVTL pre-announced that they would be raising guidance at this conference, but probably not, there's still more than a month to go before the quarter's end.
Banging on the $22 door now :)
On February 27th (http://biz.yahoo.com/ap/070227/novatel_wireless_outlook.html?.v=1), NVTL gave the following guidance:
«Novatel expects to post a first-quarter adjusted profit of about 16 cents per share on revenue of about $80 million.»
«The company also said it expects an annual profit, excluding items, of between 55 cents and 70 cents per share on revenue of $330 million to $350 million. Analysts currently expect adjusted 2007 profit of 36 cents per share on revenue of $337.7 million.»
Then on March 26 (http://biz.yahoo.com/bw/070326/20070326005429.html?.v=1), just before the end of the 1st quarter, they raised guidance:
«Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million. Non-GAAP EPS, which excludes stock based compensation expense, is expected to be above $0.35 per diluted share. These expected results compare to previous guidance of revenues of $80 million and non-GAAP EPS of $0.16 per diluted share.»
And then they beat expectations and raised guidance for the full year:
• Novatel Lifts 2007 Outlook (http://biz.yahoo.com/ap/070501/novatel_outlook.html?.v=1)
AP (Tue, May 1)
Now, for the second quarter the company projected the following:
«For the second quarter, Novatel projects earnings, excluding certain expenses, to range from 20 cents to 22 cents per share on $90 million in sales.»
So, the company gave guidance of a sequential decline in sales and EPS, from Q1 to Q2. But that's strange, since in the company's words, the 1st quarter is seasonally a weak period:
«Novatel Wireless Inc., which provides wireless broadband access services to the mobile communications market, said Tuesday a strong order backlog will drive profit in the first quarter, which has typically been a seasonally soft period for the company.»
The numbers confirm the words:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37302;image)
Q2 revenues were always higher than Q1. So, if seasonality continues (I don't see why not), the company will have to raise guidance, and by a lot, before the next earnings results presentation in August.
Even better, historically Q3 is also stronger than Q2 and Q4 is stronger than Q3. So, the remarkable Q1 results were even better, if we consider they were achieved during the weakest period of the year.
I think I made my point. I'll keep on holding NVTL.
The more I think and learn about NVTL, the more I like it. One could think, "ok, NVTL sells those PC cards to allow on the go mobility and internet from everywhere, but what happens when everybody already has one of those?"
As I was watching a bit of TV today (Dr. House is cool 8)), when commercials started I saw advertising from TMN, one of NVTL's costumers. And now they're bragging about 7.2 MB of internet speed. I remember that a couple of months before they were talking about 3.6 MB.
So, I guess that, like it happens with most computers and peripherals, things keep improving and being updated. A year from now people won't want just internet everywhere, they're going to want it with increasing speed. Who's going to supply the upgraded PC cards to allow that? You guessed it, NVTL is the strongest company in the field, stronger than SWIR.
I'm not sure if to have higher speed one needs a better PC card, but I have no doubts that these things also need to be upgraded.
I'll keep holding NVTL as I expect management to raise Q2 and full year 2007 guidance.
NVTL's bull trend has been truly friendly to shareholders. I don't see many people reading this thread, let me guess, you took profits? Too soon.
To let the profits run, as much as you can, is a valuable lesson. One needs these big fat profits to make big money in this game, no one ever got rich taking 10-20% profits in stocks. But, of course, it comes from human nature to be afraid of losing what was already earned. It's much easier to take a small profit than a small loss, yet, nobody said this game is easy.
NVTL doesn't need news to go up, everybody that looks at the company's products (http://www.novatelwireless.com/) sees that worldwide demand for them is soaring. Therefore the company will raise guidance (again), because the one it gave previously was way too conservative.
I'll keep on holding NVTL.
There isn't much need to comment on this thread because NVTL is one of the most solid stocks on 3SOF board. So I just keep on holding it and checking on your updates. I think your $30 target may be somewhat conservative in the long run, but you also mentioned that the company may raise the profit target in which case you can update the model, right? Good pick!
okay David, let´s talk about NVTL!!!
what about the following statement?
NVTL: JMP Sec Starts @ Mkt Outperform; Sets Tgt @ $27.5; Analyst Notes
Thursday , May 31, 2007 10:03ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm: JMP Securities
Ratings Action: INITIATE
Current Rating: Mkt Outperform
Target Price Action: INITIATE
Target Price: $27.50
Analyst Comments: According to the firm, Novatel Wireless provides external and embedded 3G wireless modems for use on the world's growing number of 3G networks. They believe that Novatel Wireless provides investors with a means to play the growing adoption of broadband wireless data services enabled by the growing deployments of next-generation wireless data networks. In checks this month with 45 Sprint, Verizon, and AT&T stores in large and small cities alike, they learned that end demand for external 3G modems is exceptionally strong, with particular strength in USB modems as consumers begin to embrace 3G data services. Novatel Wireless' stock is currently trading at 20.5x the firm's CY07 operating EPS estimate of $1.12, 18.8x their CY08 operating EPS estimate of $1.22, and at a trailing P/S multiple of 2.4x. These are levels that they consider to be compelling given the company's significant growth opportunities over the next two to three years.
on fire
yours Oliver ;)
QuoteI think your $30 target may be somewhat conservative in the long run, but you also mentioned that the company may raise the profit target in which case you can update the model, right? Good pick!
Thanks berloga, but this is really realcoolhead's pick, congrats to him, not me :)
Yes, I can update my estimates for NVTL (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main), but as I look at them, they seem stretched enough already. I have just 2% dilution rate, 50% revenue CAGR (perhaps it will be more, it has been more), 8% net profit margin (I would like to have more, but management said over the latest conference call this is what we should expect from the business over the long term) and a 26 times earnings multiple, which is already 62.5% above the market average of 16.
I expect revenue growth in 2007 to be more than 50%, but over 2008 and 2009, I don't know, at this point I see a 50% growth estimate as appropriate. The greatest potential to expand NVTL's value is if net profit margin expands from the 8% region to the 16% region. That would double the business's long term value.
But you're right berloga, at $23 there's nothing to talk about, the stock has only one way to go.
Quoteokay David, let´s talk about NVTL!!!
what about the following statement?
It's a nice statement la-onda, thanks for sharing :)
I'll keep holding NVTL.
Analysts keep raising their estimates for NVTL:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37538;image)
But they're still way below future reality in my view. For example, they're still forecasting just $0.82 EPS for 2007, but the company made $0.34 in the first quarter alone, and I expect strong growth going forward.
Over the past few days there was a multiple expansion for the Business Software & Services industry, which now trades at a 32.5 average P/E (http://finance.yahoo.com/q/co?s=NVTL). I've changed my EPS multiple estimate for NVTL accordingly, and my optimal selling price rose from $30.15 to $37.69 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
I'll keep holding NVTL.
NEW YORK, June 1 (newratings.com) - Analysts at JMP Securities initiate coverage of Novatel Wireless Inc (NVTL.NAS) with a "market outperform" rating. The target price is set to $27.50.
In a research note published yesterday, the analysts mention that the company provides external and embedded 3G wireless modems through service providers, vertical-specific computing vendors and laptop computer manufacturers. Recent checks indicate robust end-demand for external 3G modems, due to Rev A upgrades by Verizon Wireless, and improved pricing trends, the analysts say. Novatel Wireless faces significant opportunities to grow over the next two-or-three years, JMP Securities adds.
NVTL's fundamental landscape didn't change and the stock continues to rise. However, the Business Software & Services (http://finance.yahoo.com/q/co?s=NVTL) industry average earnings multiple declined from 32.5 to 28.97, so I changed my EPS multiple estimate (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main) accordingly.
Now I get $33.6 as the optimal selling price.
I'll keep holding NVTL.
Bulls don't let go of buying NVTL. Yesterday the stock was pushed higher by its main competitor, SWIR, which rose 11.7%:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37692;image)
I should have bought not only NVTL but also SWIR, it is the sector that is on fire. Anyway, NVTL is the strongest of the two, I expect management to raise Q2 guidance or beat estimates by a wide margin.
I'll keep holding NVTL.
fyi:
Novatel Wireless and NexAira Announce Strategic Partnership
Wednesday, June 06, 2007 08:00ET
SAN DIEGO, Jun 06, 2007 (BUSINESS WIRE) -- Novatel Wireless, Inc. (Nasdaq:NVTL), a leading provider of wireless broadband access solutions, and NexAira, a strategic solutions provider of wireless data applications, today announced a technology distribution agreement under which NexAira will resell the Novatel Wireless broadband product line exclusively to its distributor, agent and operator customers.
"NexAira's rapidly growing sales organization is encountering more and more customers requiring cost-effective wireless broadband access solutions," said Garry Bourns, president of NexAira. "The Novatel Wireless product portfolio enables us to offer our customers wireless broadband solutions that help them increase productivity, improve operational efficiencies and maintain a competitive edge. We are pleased that Novatel recognizes Nexaira's significant market presence and has entrusted us to be a reseller."
NexAira has been very successful as the exclusive North American distributor of the world's first HSDPA ExpressCard(TM), the Novatel Wireless Merlin(TM) XU870. Designed to provide laptop computers owners with high-speed wireless broadband access over cellular networks, the Merlin XU870 ExpressCard features an integrated, external flip antenna, maximizing data speed performance and allowing for stronger network signal reception.
Leveraging its success reselling the Merlin XU870, NexAira will also begin distribution of the Merlin PC720 PC card, the Merlin X720 ExpressCard and the Ovation(TM) MCD3000 USB modem to regional operators, MVNOs, dealers and agents looking to offer their customers best in class EV-DO Rev A mobile broadband solutions. In addition, NexAira will provide Express Card accessories including the XCA-3 universal adapter and XUA-1 USB sleeve. The NexAira estore will feature all products and accessories, providing for rapid order fulfillment.
Later this year, NexAira will begin distribution of the Expedite(R) line of embedded modules with the E720 for EV-DO Rev A networks and the E860D for HSDPA networks. NexAira bundles the Expedite line of products with integration services to provide machine-to-machine, telemetry, and mobility device manufacturers with the latest in wireless broadband solutions for integration into their products.
Building on a strong partnership that has processed more than $4 million of business in the first quarter of 2007, this agreement leverages NexAira's experienced technical support engineers and expertise in wireless product customization and order fulfillment. Subscribers to GSM and edge network providers in the United States, as well as Mac users can now utilize the NexAira estore for real-time access to best in class Novatel Wireless products and accessories.
"In the burgeoning mobile age, business professionals and consumers alike are growing dependent on high-speed remote broadband access," said Brad Weinert, acting CEO and COO of Novatel Wireless. "NexAira's experienced sales and support teams have a proven ability to move our product through its sales channel with unprecedented speed and accuracy, making the Novatel Wireless broadband access solutions available to a wide variety of end users."
SIWR was added to Zacks Elite "Timely Buy" list on 05/29. Could that be one of the reason making the stock higher? Will Zack's picks help 3onfire besides our member's picks?
Quote from: jackyw on June 06, 2007, 09:34:55 AM
SIWR was added to Zacks Elite "Timely Buy" list on 05/29. Could that be one of the reason making the stock higher? Will Zack's picks help 3onfire besides our member's picks?
Hi jackyw, thanks for your question :)
I think that what triggered SWIR's 12% advance day on Tuesday was the following news:
• O2 announces Sierra Wireless USB Modem (http://biz.yahoo.com/prnews/070605/to220.html?.v=49)
PR Newswire (Tue, Jun 5)
There was also an upgrade from CIBC world markets:
Sierra Wireless Surges on Upgrade (http://biz.yahoo.com/ap/070605/sierra_wireless_mover.html?.v=1)
And Zack's made the following comment:
«Momentum - Sierra Wireless, Inc. (Nasdaq: SWIR)
On Apr 26, Sierra Wireless, Inc. reported first-quarter earnings of 24 cents per share, up from 10 cents per share in the year-ago period and 12 cents above expectations. After climbing over 26% in 2006, roughly double the S&P 500 return over the same period, SWIR has soared 57% year-to-date. The stock is currently trading near three-year highs after surpassing resistance levels that had held for 12 months.»
Of the three, I believe Zack's recommendation had the least effect, since they issue several buy recommendations every day.
Yes, SWIR is attractive, but NVTL is better, as I've shown in previous updates.
I'll keep holding NVTL.
NVTL will present at a Bear Sterns conference:
• Novatel Wireless to Present at the Bear Stearns 18th Annual Technology/Communications/Internet Conference (http://biz.yahoo.com/bw/070606/20070606006184.html?.v=1)
Business Wire (Wed, Jun 6)
«"Novatel is very pleased to be working with Aliant to deliver next generation mobile data devices," said Brad Weinert, acting CEO and COO for Novatel Wireless. "Novatel Wireless' EV-DO Rev A product line enables Aliant to provide increased upload and download speeds connecting enterprise customers to remote corporate resources and consumers to their digital content anytime, anywhere."»
I'll keep holding NVTL.
*DJ Novatel Wireless Fincl Chief Halvorson Resigns>NVTL
.
(MORE TO FOLLOW) Dow Jones Newswires
June 08, 2007 08:15 ET (12:15 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 08 15 AM EDT 06-08-07
**Brought to you by Scottrader, a product o*DJ Novatel Wireless Sees 2Q Non-GAAP EPS 29c-EPS 31c >NVTL
.
(MORE TO FOLLOW) Dow Jones Newswires
June 08, 2007 08:16 ET (12:16 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 08 16 AM EDT 06-08-07
*DJ Novatel Wireless Raises 2Q Rev View To $95M From $90M>NVTL
.
(MORE TO FOLLOW) Dow Jones Newswires
June 08, 2007 08:18 ET (12:18 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 08 18 AM EDT 06-08-07
*
**Brought to you by Scottrader, a product of Scottrade Inc**f Scottrade Inc**
Press Release Source: Novatel Wireless, Inc.
Novatel Wireless Increases Second Quarter Guidance
Friday June 8, 8:15 am ET
Company Announces Resignation of CFO Dan Halvorson
SAN DIEGO--(BUSINESS WIRE)--Novatel Wireless, Inc. (Nasdaq:NVTL - News), a leading provider of wireless broadband access solutions, today raised guidance for its second quarter ended June 30, 2007 and announced the resignation of Chief Financial Officer Dan Halvorson, effective June 15th, to pursue another opportunity.
ADVERTISEMENT
Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.
"We are currently seeing strong demand across our major product lines, most notably for our ExpressCards and Ovation USB devices," commented Brad Weinert, Novatel Wireless' acting Chief Executive Officer. "Wireless data is clearly becoming a vital component of carrier plans, as enterprises and consumers increasingly recognize the benefits of the technology."
Mr. Weinert continued, "We thank Dan for all of his contributions in the past as Novatel Wireless has grown and diversified over the last three years. We wish him well in the future. An active search for Dan's replacement is ongoing and we expect to complete this search in the near future."
About Novatel Wireless
Novatel Wireless, Inc. is revolutionizing wireless communications. The Company is a leader in the design and development of innovative wireless broadband access solutions based on 3G WCDMA (HSDPA & UMTS), CDMA and GSM technologies. Novatel Wireless' Merlin(TM) PC Cards and ExpressCards, Expedite® Embedded Modules, MobiLink(TM)Communications Software Suite, Ovation(TM) Fixed Mobile Convergence Products and Conversa(TM) Software Suite enable high-speed wireless access. The company delivers innovative 3G solutions to operators, distributors and vertical markets worldwide. Headquartered in San Diego, California, Novatel Wireless is listed on NASDAQ: NVTL. For more information please visit www.novatelwireless.com. (NVTLE)
Cautionary Note Regarding Forward-Looking Statements
Some of the information presented in this release constitutes forward-looking statements based on management's current expectations, assumptions, estimates and projections. In this context, forward-looking statements often address expected future business and financial performance and often contain words such as "may," "estimate," "anticipate," "believe," "expect," "intend," "plan," "project," "will" and similar words and phrases indicating future results. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. The Company therefore cannot guarantee future results, performance or achievements.
Factors that could cause actual results to differ materially from Novatel Wireless' expectations are set forth as risk factors in the Company's SEC reports and filings and include, without limitation, (1) the future demand for wireless broadband access to data, (2) the future growth of wireless wide-area networking, (3) changes in commercially adopted wireless transmission standards and technologies, (4) continued acceptance of the Company's current products and market demand for the Company's anticipated new product offerings in 2007, (5) increased competition and pricing pressure from current or new wireless market participants, (6) dependence on third party manufacturers in Asia and key component suppliers worldwide, (7) unexpected liabilities or expenses, (8) the Company's ability to introduce new products in a timely manner, (9) litigation, regulatory and IP developments, (10) dependence on a small number of customers, (11) the effect of changes in accounting standards and in aspects of our critical accounting policies and (12) the Company's plans and expectations relating to strategic relationships, international expansion, software and hardware developments, personnel matters and cost containment initiatives.
These factors, as well as other factors detailed from time to time in the Company's SEC reports and filings (available at www.sec.gov), could cause actual results to differ materially. Novatel Wireless assumes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as otherwise required pursuant to applicable law and our on-going reporting obligations under the Securities Exchange Act of 1934, as amended.
Non-GAAP Financial Measures; GAAP EPS
Novatel Wireless has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP diluted earnings per share. Novatel Wireless uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Novatel Wireless's ongoing operational performance. Novatel Wireless believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Novatel Wireless' industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures discussed above exclude FAS 123R share-based compensation expense.
The Company continues to evaluate the factors that might impact diluted GAAP EPS, which consist primarily of FAS 123R share-based compensation expenses and accruals for income tax expense. The FAS 123R share-based compensation expenses are expected to vary depending on the number of new grants issued to both current and new employees, and changes in the Company's stock price, stock market volatility, expected option life, and risk-free interest rates (all of which are difficult to estimate). In addition, the factors that impact the Company's deferred tax assets are expected to vary from period to period, also making diluted GAAP EPS difficult to estimate.
©2007 Novatel Wireless. All rights reserved. The Novatel Wireless logo, Merlin, Expedite, MobiLink, Ovation and Conversa are trademarks of Novatel Wireless, Inc. Other product or service names mentioned herein are the trademarks of their respective owners.
Contact:
Novatel Wireless
Marcy Graham, 858-320-8837
Director, Investor Relations
[email protected]or
The Blueshirt Group
Chris Danne, Rakesh Mehta, 415-217-7722
Investor Relations
[email protected][email protected]--------------------------------------------------------------------------------
Thanks soxguy, as expected, NVTL raised 2nd quarter guidance:
• Novatel Wireless Increases Second Quarter Guidance (http://biz.yahoo.com/bw/070608/20070608005162.html?.v=1)
Business Wire (Fri 8:15am)
But the CFO is resigning. Since the stock has been up so much, I guess people will use the CFO excuse to take profits, as they're always looking for an excuse to do that.
Longer term, fundamentals keep improving, NVTL goes higher.
NVTL's management gave the following guidance at the Q1 earnings presentation:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37845;image)
And on Friday they said this:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37846;image)
The revenue guidance rose just 5.55%, not very significant, but the EPS guidance revision was a 42.8% revision, which is quite significant and in line with what we've been expecting here at 3Stocks.
I believe there will be one more upward revision before the quarter ends, and of course, they'll have to revise their full year guidance higher too.
If the share base compensation stays at 6 cents per share, we're looking at about $0.24 EPS for Q2 2007 (but I expect more than this, the company will issue another guidance or beat expectations). Plus $0.34 from the first quarter, we get $0.58 EPS for the first half of the year.
Analysts pushed their average full year 2007 estimate higher, to $0.89 ...
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=37847;image)
... up from $0.82, but since the company already has $0.58 in the pocket, I don't think it is appropriate to expect just $0.89 for the full year. Even more so considering the second half is seasonally stronger. I see $1.16 as the very minimum. It could be $1.3 or more.
I'll keep holding NVTL.
upgrade here we go!
Novatel Wireless "buy," target price raised
Monday, June 11, 2007 2:58:05 AM ET
Montgomery & Co
NEW YORK, June 11 (newratings.com) - Analysts at Montgomery & Co maintain their "buy" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company.
The target price has been raised from $24 to $30.
In a research note published this morning, the analysts mention that the company has raised its guidance for the June quarter due to robust demand for its ExpressCard products and its Ovation product family. The Ovation product line is likely to continue to boost Novatel Wireless' top-line growth and gross margins, the analysts say. The sudden resignation of CFO Dan Halvorson does not indicate any substantial issues at the company, Montgomery & Co adds. The EPS estimates for 2007 and 2008 have been raised from $1.05 to $1.26 and from $1.25 to $1.47, respectively.
&
DivX Names Dan L. Halvorson as Senior Vice President and Chief Financial Officer
Monday , June 11, 2007 08:30ET
SAN DIEGO, Jun 11, 2007 (BUSINESS WIRE) -- DivX, Inc. (NASDAQ:DIVX) today announced that it has named Dan L. Halvorson as the Company's Senior Vice President and Chief Financial Officer. Mr. Halvorson brings nearly 20 years of experience, joining DivX from Novatel Wireless (NASDAQ:NVTL) where he was Chief Financial Officer as that company diversified and experienced rapid revenue growth.
"We are very pleased to welcome Dan to the DivX team," said Jordan Greenhall, CEO and co-Founder of DivX. "With his strong mix of public company, finance and accounting experience, Dan will play an important role helping to guide us through our next growth wave as we seek to expand our business and penetrate new product categories. I am confident that Dan will be a strong fit with our mission to innovate, execute and deliver new products and services designed to improve the experience of media."
Mr. Halvorson added, "The DivX organization demonstrated a tremendous level of optimism, energy and passion for their community that motivated me to take on this opportunity. I believe the company is in the early stages of a tremendous market opportunity and I am energized to join the team at this important time."
During his 19-year career, Mr. Halvorson has served many senior finance and accounting roles at a number of public companies. Mr. Halvorson was named Chief Financial Officer and Chief Accounting Officer at Novatel Wireless in early 2004 and served those roles during a time when the company grew its annual revenue from $33 million to a current run rate of nearly $400 million. He joined Novatel Wireless in 2000 prior to its IPO, serving in a variety of financial roles including Vice President of Finance, Chief Accounting Officer and Treasurer. From 1998 to 2000, he was Director of Finance at Dura Pharmaceuticals, which was acquired by Elan in 2000. He was also Director of Finance at Alliance Pharmaceuticals from 1996 to 1998. Previous to his public company roles, Mr. Halvorson spent eight years in public accounting at Deloitte & Touche and PriceWaterhouseCoopers, serving both public and private client companies. Mr. Halvorson is a Certified Public Accountant and holds a Bachelor of Science from San Diego State University.
Mr. Halvorson will officially join the company on June 18 in a transitional role, and will assume full time duties on July 16.
cheers
Oliver
Thanks for posting that analyst upgrade la-onda :)
I especially enjoyed the following part:
QuoteThe EPS estimates for 2007 and 2008 have been raised from $1.05 to $1.26 and from $1.25 to $1.47, respectively.
Montgomery & Co is a lot more optimistic than others, since the average analyst is expecting just $0.89 for 2007 and $1.04 for 2008 (http://finance.yahoo.com/q/ae?s=NVTL).
I would go more with Montgomery numbers, since the company already had EPS of about $0.58 for the first half of the year.
If we multiply the $1.26 EPS estimate by 31.53, which is the Business Software & Services industry average earnings multiple, we get to a share price of $39.73. I need to revise my EPS multiple estimate higher. Done, the optimal selling price rose to $36.56 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
I'll keep holding NVTL.
So, NVTL's CFO went to work for DIVX:
• DivX names new CFO (http://us.rd.yahoo.com/finance/external/cbsm/SIG=11iiumket/*http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b0DDCD7D2-C9DF-4DBF-94A9-2CC61996E8FD%7d&siteid=yhoo&dist=yhoo)
at MarketWatch (Mon 9:26am)
Probably DIVX paid more. Not a problem for NVTL. From the page views I'm getting on this thread I know NVTL is the least of your worries, let me move on to the next, I'll keep holding NVTL.
support is at around $22.00
If you look at the Main Portfolio's table you see that NVTL, despite being so attractive, both from a technical and fundamental standpoint, has the lowest "% to Exit", at just 49%.
But perhaps one of my variables is too low, and that's net profit margin. You see I estimate 8% long term net profit margin, but an expansion in selling of the company's Ovation products (http://www.novatelwireless.com/products/ovation/index.html) may lead to an higher net profit margin.
In fact, if we pay closer attention to the company's new Q2 guidance:
«Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.»
So, about $0.30 Non-GAAP EPS. This probably means about $0.24 GAAP EPS on a fully diluted basis, and considering 30,422,945 shares outstanding this gives me $7.3 M net income. With $95 M in revenues, $7.3 M net income means net profit margin of 7.7%, so, roughly 8%, which is my long term estimate.
So far there's no reason to upgrade my estimates, the optimal selling price continues to be $36.56 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
I'll keep holding NVTL.
http://www.evdoinfo.com/content/view/1973/64/
novatel device - message board yahoo.com of NVTL today:
Lots of people asking this question in various places.
This thread will maintain our official info about router compatibility with the 595U.
The Kyocera KR1 does NOT work with the 595U and judging from the fact that the KR1 still does not work with PC Card version (AC595), the KR1 is not likely to ever work with the 595 or 595U.
The TopGlobal MB6800 does work with the 595U but does not charge the internal battery, causing failed connection after about two hours.
Currently, the only way to use the 595U with an EVDO Router is a combination of the TopGlobal MB6800 and a powered USB hub. Read the following for more information:
http://www.evdoinfo.com/content/view/200...
If you don't like the idea of having to buy one more piece of equipment in addition to the router, and you are still within your 30-day trial period for the 595U, you may want to consider canceling that service and buying the Novatel u720 from us -- then we'll give you $35 off the compatible Kyocera KR1 router. (price after discount is $179.99)
http://www.evdoforums.com/thread6005.html
NVTLs product U720 looks like outselling because of huge demands.
fyi:
NVTL: Morgan Joseph Sets @ Hold; Analyst Notes
Tuesday , June 12, 2007 08:40ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm: Morgan Joseph & Co. Inc.
Current Rating: Hold
Analyst Comments: The firm is transitioning coverage on the stock. They point out the company's superb execution, and strong 3G data adoption at both Sprint and Verizon, has renewed interest in the Novatel story. They expect overall industry dynamics to remain robust, but are cautious in that they believe near-term expectations for the company are fairly reflected in the shares at current levels, and therefore are returning investors' attention to the story, but with a Hold rating.
Quote from: nexta on June 14, 2007, 05:20:35 PM
http://www.evdoforums.com/thread6005.html
NVTLs product U720 looks like outselling because of huge demands.
Thanks for the interesting information nexta :)
QuoteAnalyst Comments: The firm is transitioning coverage on the stock. They point out the company's superb execution, and strong 3G data adoption at both Sprint and Verizon, has renewed interest in the Novatel story. They expect overall industry dynamics to remain robust, but are cautious in that they believe near-term expectations for the company are fairly reflected in the shares at current levels, and therefore are returning investors' attention to the story, but with a Hold rating.
Some analysts are more optimistic than others about NVTL. I just look at the recent history, project it for the future and get to an optimal selling price, let me see, of $35.88 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
As expected, NVTL recently raised guidance. But I expect them to beat their updated guidance when they report Q2 results.
I'll keep holding NVTL.
As I look at my valuation model for NVTL, perhaps where I'm being too conservative is my revenue growth forecast, since I have a revenue CAGR estimate of 50% and revenue growth in Q1 2007 was 172% :o
Say NVTL's revenues grow 100% in 2007, 70% in 2008 and 40% in 2009, the final revenue number would then be $1,033 M. What I have on my valuation model is just $735.7 M.
If I consider that rough estimate of 100% revenue growth in 2007, 70% in 08 and 40% in 09, which seems reasonable, my revenue CAGR estimate should be 68% instead of 50% (1.68 instead of 1.5 in the valuation model).
This "slight" change increased the optimal selling price from $35.88 to $47.48 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main).
NVTL's market price seems to be well below its potential, no doubts I'll keep holding the stock.
NVTL retreated 1% today because some people needed to take profits. There's nothing we can do, except keep holding the stock and ignore the short term fluctuations.
0.53% advance day for NVTL. No news out. I'll keep holding.
Zacks said bullish things about NVTL:
«Our Bull of the Day recommendation is for Novatel Wireless (Nasdaq: NVTL). Recently, the company provided encouraging revised financial estimates for its upcoming second quarter 2007. Effective diversification into the multi-pronged 3G market, with innovative product introductions, fostered record breaking revenue and net income over the past quarter. We believe long-term growth prospects remain firm as telecom carriers increasingly deploy high-speed 3G wireless data networks.»
But failed to have a positive effect on the stock, which continues to consolidate recent gains. The general market also didn't help. I expect NVTL to raise guidance again or to beat its internal estimates when it reports Q2 2007. I have 68% revenue CAGR on my valuation model, but at least in 2007, revenues are growing a lot faster, for example, in Q1 2007 revenue growth from Q1 2006 was 172%.
I'll keep holding NVTL.
New all time closing high for NVTL. Just let the profits run.
NVTL seems to be waiting for the ascending trendline or the 50 days SMA to catch up before a new bull leg unfolds. I'll keep holding NVTL.
back from Bali (on fire!) >:D
Skyrocketing Novatel Still a Buy
Tuesday June 19, 10:46 am ET
By Zacks Equity Research
Though Novatel Wireless (NasdaqGM: NVTL - News) shares have appreciated rapidly thus far in 2007, Zacks senior telecom analyst David Weissman, CFA is keeping his Buy recommendation on the stock. Here's why:
Novatel Wireless, a leading provider of wireless data access cards and embedded solutions, continues to perform exceptionally well, supported by continued sales of technology that facilitates access to wireless data networks. The gradual adoption of 3G technologies throughout the world is generating torrid demand for Novatel\'s ExpressCard product line, targeting EV-DO Revision A and HSDPA networks. Recently, the company provided encouraging revised financial estimates for its upcoming second quarter 2007. Effective diversification into the multi-pronged 3G market, with innovative product introductions, fostered record breaking revenue and net income over the past quarter. We believe long-term growth prospects remain firm, as telecom carriers increasingly deploy high-speed 3G wireless data networks. We reiterate our Buy rating and raise our valuation target for the company based on improved visibility. With Novatel\'s next-generation products now well entrenched in the market, we believe the company may continue to generate increased revenue, with improved margins. Therefore, we believe the current valuation of the stock is still below its valuation potential. We raise our six-month target price to $26, based on a net of cash P/E [price-to-earnings] multiple of 21.7x our fiscal 2007 earnings estimate plus its net cash balance of $2.98/share.
cheers
Oliver
NVTL Info part 1:
NVTL Info part 2:
I am holding NVTL with strong hands >:D 8)
Form 8-K for NOVATEL WIRELESS INC
22-Jun-2007
Regulation FD Disclosure
ITEM 7.01 Regulation FD Disclosure.
On June 1, 2007, Peter Leparulo, the Company's Executive Chairman, executed a written stock trading plan in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. On June 13, 2007, Catherine Ratcliffe, the Company's Vice President, Business Affairs, also executed such a plan. Subject to specified limitations, these plans provide for the non-discretionary periodic sale of a portion of the Company stock held by the executives, including shares issuable upon exercise of stock options, in order to gradually diversify assets for estate planning purposes. Shares could be sold under these plans during the period commencing on July 1, 2007 and ending in January 2008. The plans were adopted during the Company's quarterly open trading window and in accordance with its written trading policy. All sales made pursuant to these plans will be publicly disclosed.
The market went down and NVTL rose 2.06%. Relative strength continues. I'll continue holding NVTL.
The strongest stock in the portfolio. They do deliver products to the market at a decent profit margin, considering the nature of their hi-tech business. In the case of NVTL we do not have to wait for them to unfold a strategy or else conquer new markets - they are already there executing. We need more picks like this one!
fyi:
NVTL: Short Interest UP 15.0% to 8.4M in Jun 2007
Tuesday , June 26, 2007 16:36ET
According to new short interest data from NASDAQ, short interest for Novatel Wireless Inc (NasdaqNM: NVTL) INCREASED 15.0% to 8,368,865 shares for the month ended mid-June, 2007.
SYMBOL MAY JUNE CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NVTL 7,276,656 8,368,865 +1,092,209 +15.01% 6
Based on NVTL's 20-day average daily share volume of 1,403,795, it would require approximately 6 day(s) of buying to cover this short interest.
&
Novatel Wireless Appoints New Member to Board of Directors
Tuesday , June 26, 2007 08:30ET
SAN DIEGO, Jun 26, 2007 (BUSINESS WIRE) -- Novatel Wireless, Inc. (Nasdaq: NVTL), a leading provider of wireless broadband access solutions, today announced the appointment of John Ross to the company's Board of Directors. Mr. Ross joins the Novatel Wireless Board of Directors with 15 years experience in developing profitable businesses at some of America's largest telecommunications companies.
Mr. Ross is currently President and Chief Executive Officer of Media Connex, Inc., a San Diego based company that provides bundled services and equipment for wireless networks, network security, advanced diagnostics, and other IT services and solutions.
Mr. Ross' extensive business and technology background includes leadership positions at major telecommunications companies, including Motorola from 1995 until 2000, at U.S. Robotics prior to its acquisition of Palm, Inc. in 1995, and at Littelfuse, Inc. At Motorola, Mr. Ross was responsible for numerous breakthrough industry initiatives including development and deployment of CDMA StarTACs, the first clamshell mobile phone, which set several technical standards for future mainstream cellular equipment and in 2005 was listed as #6 on The 50 Greatest Gadgets of the Past 50 Years in PC World. He also held leadership roles in Motorola's Japan CDMA infrastructure deployment. Mr. Ross also held several key positions at Novatel Wireless, including heading Strategic Business Development, before founding Media Connex.
Mr. Ross holds an MBA from the Kellogg Graduate School of management at Northwestern University and is a magna cum laude graduate of Washington University, where he received a Bachelor of Science degree in Electrical Engineering.
"We're thrilled to gain the industry and marketing expertise John brings to our Board as we continue to build our organization and bring new perspectives to the company," said Peter Leparulo, Executive Chairman of the Novatel Wireless Board of Directors. "John has a proven record of success in the wireless industry, and we look forward to his leadership and expertise in guiding the Novatel Wireless team to an even greater global presence in our industry."
"Novatel Wireless is an industry leader, and it is an honor to join this strong and dedicated team," said Mr. Ross. "I look forward to contributing to future successes at the company and to working with the Novatel team in expanding its leadership position."
Novatel Wireless also announced today that it has been added to the small-cap Russell 2000 Index when the Russell Investment Group recently reconstituted its family of U.S. indexes on June 24. Membership in the broad-market Russell 3000, which remains in place for one year, means automatic inclusion in the large-cap Russell 1000 or small-cap Russell 2000 as well as the appropriate growth and style indexes. Russell determines membership for its equity indexes primarily by objective, market capitalization rankings and style attributes.
Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. More than $2.5 trillion in assets currently are benchmarked to them. Investment managers who oversee these funds purchase shares of member stocks according to that company's weighting in the particular index. Annual reconstitution of Russell indexes captures the 3,000 largest U.S. stocks as of the end of May, ranking them by total market capitalization to create the Russell 3000. The largest 1,000 companies in the ranking comprise the Russell 1000 while the remaining 2,000 companies become the widely used Russell 2000. These investment tools originated from Russell's multi-manager investment business in the early 1980s when the company saw the need for a more objective, market-driven set of benchmarks in order to evaluate outside investment managers.
Thanks for posting the news la-onda. In respect to the rise in the short interest, well, many people don't seem to accept well a stock that goes up the way NVTL did. They tend to fight it.
I admit that there may be a small correction but I see higher prices over the medium term, as fundamentals continue to improve.
Another record close for NVTL. This is nice, I'll just keep letting the profits run, wondering when will they raise guidance again, or by how much will they beat the guidance they gave for the second quarter.
NVTL raised guidance for the 2nd quarter, but still not for the full year. That is another good news to expect in the near future. Moreover I expect NVTL to beat its own guidance when it reports Q2 results (it has been that way over the past two quarters).
As I look to my valuation model (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main), I see the stock is delivering numbers above my expectations, so definitely still undervalued in my view.
I'll continue holding NVTL.
NVTL has broken the agressive uptrend support. Is it due for another 10-15% correction before the next run up? Looks like a lot of stop limit orders are executing thus collecting the profits. Should we hold until the earnings no matter what?
I regret selling at $20. Hopefully I can re-enter this gem.
http://www.secform4.com/insider-trading/1022652.htm
This is the reason?
Quote from: berloga on July 05, 2007, 12:17:50 PM
NVTL has broken the agressive uptrend support. Is it due for another 10-15% correction before the next run up? Looks like a lot of stop limit orders are executing thus collecting the profits. Should we hold until the earnings no matter what?
NVTL closed just a bit below its ascending trendline. The 50 days SMA support is coming up at $22.41 now.
Quote from: DragonAMG on July 05, 2007, 01:13:10 PM
I regret selling at $20. Hopefully I can re-enter this gem.
You're not the only one DragonAMG, I bet there's a lot of people on the sidelines looking to buyback or buy NVTL for the first time. They were waiting for a pullback to happen. Well, here's their/your chance.
Quote from: babouk on July 05, 2007, 01:53:07 PM
http://www.secform4.com/insider-trading/1022652.htm
This is the reason?
Yes, management has been converting options and selling small amounts of shares (small in comparison to the total number of shares outstanding, I wouldn't mind having their quantity of options to convert (in some cases at $1.01) and sell for a huge profit).
Insiders don't own much of NVTL, in fact, almost nothing. Institutional investors own the company. So management is just a bunch of employees looking to get their pay check as fat as possible. But not very relevant to the overall company, they stick to their stock option compensation plans.
I would say almost anybody could run NVTL successfully, because the company's products are enjoying explosive demand across the world. The company could be in auto-pilot and still grow immensely.
It is possible that NVTL goes down to the $22 area or so in this short term dip, but that's just due to profit taking/technical factors, I don't see any change in the fundamental trends, not now or in the next few quarters.
I'll continue holding NVTL, expecting to see $30 before $20.
fyi:
Sierra Wireless, Novatel Shares Fall
Thursday July 5, 1:22 pm ET
Sierra Wireless, Novatel Shares Fall After Rival Option NV Issues Disappointing 2Q Forecast
NEW YORK (AP) -- Shares of Sierra Wireless Inc. and rival wireless modem maker Novatel Wireless Inc. fell Thursday after a Belgium-based competitor preannounced disappointing second-quarter results.
Option NV, which trades on the Over the Counter Bulletin Board in the U.S., said its results for the first half of 2007 will miss its earlier expectations. The company cited an unfavorable product mix that skewed toward older products with lower selling prices and margins.
Avondale Partners analyst John F. Bright noted that although Sierra Wireless and Novatel likely fell on Option's weak preannounement, Option's results have disappointed over the past several quarters while both Novatel and Sierra have outperformed Wall Street's expectations.
Bright, who rates Sierra and Novatel "Market Perform," wrote in a note to investors that Option's preannouncement could indicate the company is losing market share to its rivals, particularly in USB modems.
Shares of San Diego-based Novatel tumbled $2.15, or 8.4 percent, to $23.61 in afternoon trading. The stock has more than doubled since the start of the year. In the past 52 weeks, it has changed hands between $8.11 and $26.45.
U.S.-listed shares of Canada's Sierra Wireless fell $1.04, or 4.1 percent, to $24.66 in afternoon trading. The stock has traded between $10.58 and $26.22 in the past year.
putting in an order to buyback NVTL at $22.50
on a separate note - I know you don't like shorting stocks... but, FSLR - definitely looks like a bubble stock to me. Can you also do a study on AAPL? I see AAPL going to $200 then splitting. I've owned AAPL since it was $80 (when I was very scared to buy it because it looked high, now here I am thinking it will go to $200 and then split).
Quote from: la-onda on July 05, 2007, 06:07:19 PM
fyi:
Sierra Wireless, Novatel Shares Fall
Thursday July 5, 1:22 pm ET
Sierra Wireless, Novatel Shares Fall After Rival Option NV Issues Disappointing 2Q Forecast
NEW YORK (AP) -- Shares of Sierra Wireless Inc. and rival wireless modem maker Novatel Wireless Inc. fell Thursday after a Belgium-based competitor preannounced disappointing second-quarter results.
Option NV, which trades on the Over the Counter Bulletin Board in the U.S., said its results for the first half of 2007 will miss its earlier expectations. The company cited an unfavorable product mix that skewed toward older products with lower selling prices and margins.
Avondale Partners analyst John F. Bright noted that although Sierra Wireless and Novatel likely fell on Option's weak preannounement, Option's results have disappointed over the past several quarters while both Novatel and Sierra have outperformed Wall Street's expectations.
Bright, who rates Sierra and Novatel "Market Perform," wrote in a note to investors that Option's preannouncement could indicate the company is losing market share to its rivals, particularly in USB modems.
Shares of San Diego-based Novatel tumbled $2.15, or 8.4 percent, to $23.61 in afternoon trading. The stock has more than doubled since the start of the year. In the past 52 weeks, it has changed hands between $8.11 and $26.45.
U.S.-listed shares of Canada's Sierra Wireless fell $1.04, or 4.1 percent, to $24.66 in afternoon trading. The stock has traded between $10.58 and $26.22 in the past year.
Thanks la-onda, that sure is a better explanation than mine for Thursday's sell off in NVTL's shares.
It looks like just an excuse to take profits ... NVTL's chart "needed a break" ::)
One good indication from Option's guidance:
«Last week, Berg Insight forecasted that the European market alone will grow from five million 3G high speed wireless connections by the end of 2007 to 30 million by 2011.»
This is a 56.5% CAGR for the 3G high speed wireless connections market. It seems to corroborate the 68% revenue CAGR I have in my valuation model for NVTL (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main). Besides that I have an 8% net profit margin estimate and a 29 earnings multiple (the industry average is 30 now).
Quoteputting in an order to buyback NVTL at $22.50
I think NVTL's consolidation period isn't over yet (I really don't know), but I also don't think you'll get away with buying the stock at $22.5. The 50 days SMA support is already coming up at $22.58. We'll see.
Quoteon a separate note - I know you don't like shorting stocks... but, FSLR - definitely looks like a bubble stock to me.
Yes, the stock decoupled from any reasonable fundamental valuation, because it is related with the solar market. It is valued on very high future expectations, which will probably happen, but it is hard to know how much of that is priced in or not. Anyway, I wouldn't think of shorting it, because I need 30% plus return per year in a way that makes fundamental sense, and no stock is priced in a way for me to believe it will fall more than 30% a year for the next three years.
QuoteCan you also do a study on AAPL? I see AAPL going to $200 then splitting. I've owned AAPL since it was $80 (when I was very scared to buy it because it looked high, now here I am thinking it will go to $200 and then split).
Congrats on your AAPL investment DragonAMG. Everybody loves that stock, and that's part of why I don't get excited about it. Everybody knows the story and the stock trades at lofty multiples. Any small disappointment and it will fall 50%, because it is priced for perfection. If iPhone doesn't sell as everybody thinks it will, the stock will suffer. If it does, AAPL shouldn't rise all that much.
Well, I guess I'm somewhat biased towards small and mid caps. AAPL is already a $114 B market cap company. Is it going to get bigger than Intel or Cisco? Perhaps, but no big deal for the stock price ... anyway, I should have bought it like you did, great return :)
In name of
scalability I must get rid of my bias towards small and mid cap stocks. But I don't need to do that right away, not in the next few years either.
For which stock is this update? Ah, NVTL, I'll continue holding it.
I expect NVTL to beat the guidance it gave for Q2 results when it reports actual figures, as it happened over the last two quarters. The guidance the company gave was:
«Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.»
It is interesting how a 5.55% increase in revenue is expected to produce a 42.8% increase in the quarterly non GAAP EPS. Is this representative of what management called "the leverage of our business model"?
I have just 8% net profit margin estimated in my valuation model because at the 1st quarter conference call the CEO said the long term net profit margin to be expected from the business should be in the high single digits.
This doesn't match well with "leverage in our business model", does it?
But, this guidance indeed shows a pretty dramatic margin expansion from just a 5.55% revenue increase.
So, there's some hope that long term net profit margin (which is crucial) can be more than 8%. I wonder about the pricing power NVTL has, in this very high demand environment.
I'll continue holding NVTL.
Good news out for NVTL:
• Novatel Wireless Provides Expanded Carrier Support for OEMs (http://biz.yahoo.com/bw/070710/20070710005202.html?.v=1)
Business Wire (Tue 8:00am)
Of course, the people that sold shares at today's open because of Home Depot news and its worries about the housing market effects in the general economy don't have a clue of how the stock market works. Anyway, I left the camp of making general market predictions some months ago and I feel very well in my current individual stock picker skin.
QuoteOf course, the people that sold shares at today's open because of Home Depot news and its worries about the housing market effects in the general economy don't have a clue of how the stock market works. Anyway, I left the camp of making general market predictions some months ago and I feel very well in my current individual stock picker skin.
hahaha, I'm really glad I left the market timers camp, because I wasn't particularly good at market timing, as you can see at the above quote.
We've had that press release for NVTL today:
• Novatel Wireless Provides Expanded Carrier Support for OEMs (http://biz.yahoo.com/bw/070710/20070710005202.html?.v=1)
Business Wire (Tue 8:00am)
It's somewhat weird that the world leader in wireless broadband access solutions, or to make it more simple, the company that makes the hardware that allows us to have internet connection anytime, anywhere, is worth just $753 M. Doesn't it feel like a multibillion dollar business?
As I look at NVTL's products (http://www.novatelwireless.com/), I must say that I bought them twice already. My partner has them. My brother and cousins have them (but consider they're all internet related professionals). Do you have NVTL's products in your house? I mean, it's one of those products that everybody will need, or better, that everybody will prefer when compared to a normal internet connection, don't you think?
Between having internet anywhere or just in my office, I'll always prefer the first option, provided that the price is similar. And it is similar, or even better for the mobile solution in most cases.
And then the thing is always being upgraded, because we all want more and more reliability and speed, right?
I just can't see an end to the demand driving NVTL higher, it wouldn't surprise me if NVTL matures at $5 B - $10 B market cap a few years from now.
I'll keep on holding NVTL for the long term.
I guess NVTL won't raise guidance again before the Q2 earnings release, which is scheduled to happen in August 6th:
• Novatel Wireless to Report Second Quarter 2007 Results on Monday, August 6th, 2007 (http://biz.yahoo.com/bw/070711/20070711005868.html?.v=1)
Business Wire (Wed 2:00pm)
I'm very interested in having answers for the questions I wrote the other day:
Quote from: David Randolph on July 10, 2007, 04:50:43 AM
I expect NVTL to beat the guidance it gave for Q2 results when it reports actual figures, as it happened over the last two quarters. The guidance the company gave was:
«Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.»
It is interesting how a 5.55% increase in revenue is expected to produce a 42.8% increase in the quarterly non GAAP EPS. Is this representative of what management called "the leverage of our business model"?
I have just 8% net profit margin estimated in my valuation model because at the 1st quarter conference call the CEO said the long term net profit margin to be expected from the business should be in the high single digits.
This doesn't match well with "leverage in our business model", does it?
But, this guidance indeed shows a pretty dramatic margin expansion from just a 5.55% revenue increase.
So, there's some hope that long term net profit margin (which is crucial) can be more than 8%. I wonder about the pricing power NVTL has, in this very high demand environment.
I'll keep on holding NVTL.
NVTL closed at a new 52 week high, just beautiful:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38903;image)
But this isn't, by far, an all time high, check the chart since the IPO:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38902;image)
Before you start thinking that NVTL "at one point was at $200 and now it is at $27, so it is much cheaper now", let me tell you that the # of shares outstanding back in 2000 was 3.6 million (http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=nvtl&lstStatement=10YearSummary&stmtView=Ann) and now it is 30.42 million. That means that at $200 in 2000 the market cap was $720 M, and today, at $27.19, the market cap is $827 M. The company is worth more now that it trades at $27.19, than what it was worth when it was at $200. But the folks that bought at $200 and held are down 86% on their investment anyway.
It goes to show you the importance of changes in the # of shares outstanding.
And it is a bit of an alert to me to perhaps increase my dilution factor for NVTL. I have just 1.02 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main), but the company's history doesn't favor such a small number. I'll go deeper on this issue over the next update.
As for now, I have an 87% profit and I'll keep letting it grow!
NVTL's # of shares outstanding was 29,743,000 in December 31st, 2006. In March 31th, 2007, it was 30,211,000. This means an increase of 1.57% in one single quarter, which annualized gives me 6.44%.
I'm going to have to raise my dilution factor from 1.0243 to 1.0644 for NVTL. It's the problem when insiders don't have a significant share of the company, they need a very fat incentive package in terms of stock options to keep going. Apparently the CFO wanted more, so he left to pursue other opportunities.
The optimal selling price declined from $47 or so to $42.31, no big deal:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=38942;image)
But the issue will be around net profit margin. Is it going to be about 8% for the long term, or can it be more?
I'm so dumb, with the guidance the company gave I can already calculate, more or less, what the 2nd quarter net profit margin will be:
«Revenues are expected to be approximately $95 million, ahead of previous guidance of $90 million and representing year-over-year growth of over 100%. Non-GAAP EPS is expected to be $0.29 - $0.31 per diluted share, ahead of previous non-GAAP EPS guidance of $0.20 - $0.22 per diluted share and compares to non-GAAP EPS of $0.02 per diluted share in the second quarter of last year. Non-GAAP EPS excludes FAS 123R share-based compensation expense.»
If they keep expending 6 cents per quarter in share-based compensation expense (thieves >:D), GAAP EPS will be something like $0.24. If we consider the share count will increase 1.57% from the 1st quarter, the share count will be 30.69 million, so, net income will be somewhere around $7.365 M, which means a net profit margin of 7.75%, near my 8% estimate.
So, no reason to change the net profit margin in my valuation model.
NVTL is still very attractive. I'll keep letting the profits run.
Are NVTL products part of the new iPhone? Or will they be in the upgraded ones coming out later? I'm just wondering because if it's true, we will be in the $$$ for quite some time!
I'll see if I can dig out a Portelligent tear down report on iPhone. Hopefully we''l be able to tell if that's the case.
Quote from: spiritgate on July 16, 2007, 04:52:37 PM
Are NVTL products part of the new iPhone? Or will they be in the upgraded ones coming out later? I'm just wondering because if it's true, we will be in the $$$ for quite some time!
Quote from: berloga on July 16, 2007, 05:35:50 PM
I'll see if I can dig out a Portelligent tear down report on iPhone. Hopefully we''l be able to tell if that's the case.
I don't think so. I don't see any product in Novatel's website for use in mobile phones.
NVTL may pullback a bit here, but like in all previous pullbacks the stock had, I'll see it as a buying opportunity, as the trend remains bullish and fundamentals are still attractive.
My valuation model says the optimal selling price for NVTL is $42.31 (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main), and with the current fundamental landscape I'll respect the model's indication.
Here is a link to the iPHONE contents by company.
http://www.thestreet.com/_yahoo/newsanalysis/techtelecom/10365910.html?cm_ven=YAHOO&%3bcm_cat=FREE&%3bcm_ite=NA
David is right, what were we thinking? Novatel does not provide cell phone components.
Major WiFi baseband and thranceiver players are Marvel, Atheros, Broadcom and Intel. Major RF front-end players are Skyworks, RFMD, Avago, Anadigics, TriQuint, Freescale.
Thanks guys. I was reading something about it on yahoo message boards and I thought they would at least make a big announcement on that one. You can't trust anything on those boards!
NVTL has been showing why letting the profits run is so important. The best just keeps getting better, and now I have a 98% profit on this stock (but I'm not counting the money).
The way things are going NVTL will surely beat its internal 2nd quarter guidance. I'm starting to consider taking profits on an eventual gap up on the news, regardless of my valuation model.
The valuation model is a tool, not an obligation. And I sure remember what happened with SILC, where I also had a 100% profit, didn't take it when it was obvious the stock would go down over the short term and ended up bailing out with a 38% profit, because of having weak hands ::)
For now I'll keep on holding NVTL.
Press Release Source: Novatel Wireless, Inc.
Novatel Wireless Introduces Next Generation HSUPA USB Mobile Data Modem for Fixed and Mobile Environments
Wednesday July 18, 8:00 am ET
Ovation MC950D HSUPA USB Modem Combines the World's Smallest Form Factor with Cutting Edge 3G Technology to Provide Unprecedented Broadband User Experience
SAN DIEGO--(BUSINESS WIRE)--Novatel Wireless, Inc., (Nasdaq:NVTL - News) a leading provider of wireless broadband solutions, today announced the Ovation MC950D USB Modem, a HSUPA Mobile Broadband device that carries the distinction of being the world's smallest HSUPA USB modem. The MC950D also delivers marquis performance with upload and downlink speeds that meet or exceed traditional home DSL and cable modems.
ADVERTISEMENT
Optimized for HSPA and EDGE/GPRS worldwide networks, the Ovation MC950D is a tri-band HSPA and quad band EDGE/GPRS modem designed to be extremely durable and fit comfortably in any pocket. For use in the home, at the office, or on the road, the MC950D provides instant on-the-go mobile broadband access to surf the net, check email, access important business documents and much more.
"The MC950D is the embodiment of innovation and a testament to the unparalleled prowess of Novatel's engineering," said Rob Hadley, senior vice president, worldwide sales & marketing for Novatel Wireless. "With the introduction of the MC950D, Novatel Wireless continues to push the envelope in design and performance, providing consumers with the ultimate mobile broadband experience."
With support for 7.2 Mbps downlink speeds and 2.1 Mbps uplink upon launch, the MC950D offers users notably faster speeds than legacy mobile data modems.
The Ovation MC950D packs an impressive assortment of features into its miniature form factor, including fully integrated diversity antennae, receiver diversity and equalizer support to improve performance in noisy and highly mobile environments. Mobilink(TM) Lite Connection Manager Software is pre-installed on the device, significantly improving the user's out-of-box experience by eliminating the need to install drivers from a CD.
The Ovation MC950D is currently in the final stages of testing with leading carriers throughout EMEA, and is expected to be commercially available this quarter through a variety of Novatel Wireless's new and existing tier-one operator customers.
Thanks for posting the news nexta :)
• Novatel Wireless Introduces Next Generation HSUPA USB Mobile Data Modem for Fixed and Mobile Environments (http://biz.yahoo.com/bw/070718/20070718005286.html?.v=1)
Business Wire (Wed 8:00am)
One of the things I like about NVTL's products is that they're always being upgraded, which means continuous demand over the long term (also R&D costs, but that's another story).
Unfortunately the good news wasn't enough to send shares even higher, because when the general market goes down, people usually rush to take profits on their biggest winners.
We still have about three weeks until NVTL reposts 2nd quarter earnings, I'll comfortably continue holding the stock.
Zacks had a few words about NVTL today:
«Aggressive Growth - Novatel Wireless, Inc. (Nasdaq: NVTL)
Novatel's stock has been on fire, up almost 200% year-to-date. Earnings estimates have soared for this year. Over the past 90 days, this year's numbers have risen 27 cents to 90 cents per share. The company has exceeded estimates by an average of 43% over the past two quarters. NVTL's balance sheet is in great shape with no debt on the books.»
The stock rose 1.76% on the day. I'll keep holding.
David, what do you think is happening with NVTL today? It looks like a small head and shoulders has formed in the last 20 days. From a technical viewpoint, where do you think we're heading?
QuoteDavid, what do you think is happening with NVTL today?
The general market is selling off hard, people need to take profits where they have them to compensate for losses elsewhere. Not company specific, at least not that I know of.
QuoteIt looks like a small head and shoulders has formed in the last 20 days.
I don't see it in my chart kenmann.
QuoteFrom a technical viewpoint, where do you think we're heading?
The stock should be able to close above $26.44, or else it will probably touch the 50 days SMA support, which currently stands at $24.11. Longer term I believe the bull trend will continue and we'll see NVTL comfortably above $30.
I see a good chart if we close around 27 today very nice target ;D
another reason for todays price action:
NVTL: JMP Sec Cuts to Mkt Perform from Mkt Outperform; Analyst Notes
Friday , July 20, 2007 14:35ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm: JMP Securities
Ratings Action: DOWNGRADE
Current Rating: Mkt Perform (from Mkt Outperform)
Analyst Comments: According to the firm, Sprint (S) is discontinuing the very popular Novatel U720 USB modem, as the carrier awaits availability of Novatel's next-generation, small form factor wireless USB solution. They believe Novatel's next-generation product will be available toward the end of September at Sprint, leaving the possibility for a two-month gap in Novatel's sell-in results at Sprint. This gap should lead to temporary market share shifts in the data card market. Given the importance of Sprint as a customer of Novatel, the firm feels this transition will make it more difficult for Novatel to deliver a revenue and EPS surprise during the September quarter.
Quote from: Garoh on July 20, 2007, 01:30:40 PM
I see a good chart if we close around 27 today very nice target ;D
Good close and good volume Garoh :)
Quote from: la-onda on July 20, 2007, 09:33:00 PM
another reason for todays price action:
NVTL: JMP Sec Cuts to Mkt Perform from Mkt Outperform; Analyst Notes
Friday , July 20, 2007 14:35ET
Issuer: Novatel Wireless Inc (NasdaqNM: NVTL)
Analyst Firm: JMP Securities
Ratings Action: DOWNGRADE
Current Rating: Mkt Perform (from Mkt Outperform)
Analyst Comments: According to the firm, Sprint (S) is discontinuing the very popular Novatel U720 USB modem, as the carrier awaits availability of Novatel's next-generation, small form factor wireless USB solution. They believe Novatel's next-generation product will be available toward the end of September at Sprint, leaving the possibility for a two-month gap in Novatel's sell-in results at Sprint. This gap should lead to temporary market share shifts in the data card market. Given the importance of Sprint as a customer of Novatel, the firm feels this transition will make it more difficult for Novatel to deliver a revenue and EPS surprise during the September quarter.
Thanks for sharing this la-onda :)
Downgrading because of a temporary issue ... no wonder why people are so short term oriented.
Anyway, most investor's recognize NVTL's long term story and every time the stock dips, they show up to buy. Volume on Friday was the highest in two and a half months (at 3,987,100 shares) and the stock closed above the $26.44 short term support. I guess the people that sold today will be buying back when the stock dips again, from $33 to $30 ;D
I'll keep on holding NVTL.
NVTL has been sustaining all the "profit takers" very well, closing above the $26.44 short term support for the second time. Earnings will be out just at August 6th, I think we'll probably have another bull leg that takes NVTL above $30 before earnings. We'll see, I'll keep holding NVTL, it is certainly worth more than $821 M.
NVTL has been holding up better than most. When the general market comes back up, and I'm positive that within some time, it will, NVTL will make a run towards $30 plus.
There were news out today showing new uses for NVTL's products:
• Novatel Wireless Partners with ICG to Provide New Advertising Opportunities through Remote Digital Signage (http://biz.yahoo.com/bw/070725/20070725005208.html?.v=1)
Business Wire (Wed 8:00am)
The stock rose modestly today and the short term correction seems to be ending. I'll continue letting the profits run in NVTL.
NVTL was dragged down by the general market and closed below the $26.44 short term support level. But it also made a perfect touch on the 50 days SMA ascending support. I have no doubts NVTL will continue trending higher and I'll keep holding the stock.
ouch what a bad hit ??? ::)
updated analyst info from 23rd:
Novatel Wireless downgraded to "market perform"
Monday, July 23, 2007 6:40:17 AM ET
JMP Securities
NEW YORK, July 23 (newratings.com) - Analyst Samuel Wilson of JMP Securities downgrades Novate Wireless Inc (NVTL.NAS) from "market outperform" to "market perform." The target price is set to $27.50.
In a research note published on July 20, the analyst mentions that the extremely popular Novatel U720 USB modem has been discontinued by Sprint and there would be a two month's gap before Novatel's next-generation product becomes available. Sprint has said that it would recommend Sierra Wireless' AirCard(R) 595U modem to its customers in the interim period. Product transition issues at Sprint are likely to make it pose challenges to Novatel achieving EPS and revenue upside in the September quarter, JMP Securities adds.
still HOLDING
I will hold all my stocks now. If I sell, I'll regret a month later. All these jitters are temporary. There is no reason for wireless modems to stop selling because some fellas go bankrupt on their homes. Americans should lighten up - stop buying termite infested ugly looking shacks and build some nice apartment homes where they can have people as friends, not rifles and handguns.
Don't worry. NVTL is too strong to take this hit very hard. Besides, Motley Fool gives it an OUTPERFORM rating again. http://www.fool.com/investing/high-growth/2007/07/25/this-just-in-upgrades-and-downgrades.aspx This dip just gives us an opportunity to buy more!
Quote from: berloga on July 28, 2007, 11:14:06 AM
I will hold all my stocks now. If I sell, I'll regret a month later. All these jitters are temporary. There is no reason for wireless modems to stop selling because some fellas go bankrupt on their homes. Americans should lighten up - stop buying termite infested ugly looking shacks and build some nice apartment homes where they can have people as friends, not rifles and handguns.
He he, I agree with you berloga :)
In the future everybody will want to have an high speed mobile internet connection. It has to do with freedom of movement and the "work from everywhere, at anytime" trend.
I'm going to take advantage of NVTL's sharp decline to buy its closest competitor, SWIR, which has been doing better than expected and went down 12.2% on Friday, due to analyst's downgrades and general market weakness.
NVTL was up 200% year to date for a good reason. That's the main trend. The recent 24% correction from the highs was a correction to the main movement, but the main movement will probably just continue, as fundamentals are supportive.
I'll keep holding NVTL.
That is probably what took NVTL down so much:
Netgear Inc. (NTGR): shares of Santa Clara, California based communication equipment maker plunged 23.61% to $28.89 per share after the company reporeted 38% profit cut to $6.1 million. The stock was the fifth leading decliner on Nasdaq with 9 million shares traded.
chart:
http://stockcharts.com/h-sc/ui
fyi:
Forbes article:
Novatel Wireless: Overpriced And Undermanaged
Nikhil Hutheesing, Forbes Wireless Stock Watch 07.30.07, 1:20 PM ET
With the recent sell-off in the market, investors may be tempted to buy up shares in companies that saw their prices drop. The trick is to make sure that you are finding value and not just investing in companies that were overvalued and have now corrected.
Are you profiting from the move to wireless broadband and WiMax? Click here for a special report on six undervalued wireless companies set to soar.
One such company is San Diego, Calif.-based Novatel Wireless. Novatel is a maker of wireless modem PC cards and communications software. The company's stock has had a wild ride. Since 2004 it has ranged in price from about $5 to a high of $27. In June, I recommended that investors sell their shares at $25.15. Despite the recent sell-off, I still think that Novatel is overpriced. Part of the reason that the stock has had a good run is because many of the problems that had plagued Novatel one year ago are no longer issues.
Last year, Novatel suffered from a backlog of old inventory of 2.5G cards, which it had to write down, taking a $2.3 million charge. Plus, its PC card business was under pressure in Europe from competitors like Sierra Wireless and Option. Then there was the announcement that Intel and Nokia were teaming up to hit Novatel in its core business: providing embedded wireless connectivity technology to laptop manufacturers. Things improved. The announcement from Intel and Nokia turned out to be just that--an announcement. No products were ever announced, and the collaboration ended earlier this year. Besides that, Novatel's research and development efforts into embedded technologies is winning business for the company, and its products are being used by big companies such as Dell, Sony, Panasonic and Toshiba. PC card sales are also much stronger and an old product the company had seemingly written off--Ovation--has been rejuvenated and is selling well.
So why sell shares? One reason is looming competition. One big growth area for Novatel comes from the deployment of WiMax high-speed networks, which will soon be rolled out in the U.S. While the company stands to win orders, Sprint, which represented 38% of Novatel's sales in 2006 and is one of the earliest to build a WiMax network, named Samsung and ZTE as the partners that will provide the data cards and USB modems.
While it's possible that Novatel will also provide some products to Sprint, so far it has not been included in Sprint's initial list of vendors. Also, Novatel's biggest competitor, Sierra Wireless, is edging in on Novatel's market share, now selling some USB modems to Novatel's customers. The company has seen Novatel's success with its Ovation line of modems--an area that where it will likely become a competitor as well.
Novatel also has to contend with new players, such as Huawei, which continues to gain market share in the U.S. with its wireless cards and products. This increasingly competitive market could lead to pricing pressure. While Novatel certainly has an edge with the distribution channels and has the knowledge and the relationships to sell its products, other companies could break into this business.
In addition, there is a possibility that handset manufacturers will also enter the fray, becoming competitors to Novatel by offering PC cards directly or by using the handset as a modem tethered to a laptop with a cord. So far, that is not being done on a scale big enough to worry modem manufacturers like Novatel and Sierra Wireless.
While any pressure on the business will also hurt the stock, I'm concerned because investor expectations for Novatel are more lofty than ever, thanks to the better-than-expected earnings report last quarter and the company's rosy forecast for the second quarter. Given the growing competition, I think it will become increasingly difficult for Novatel to meet higher expectations, which will result in pressure on the stock.
I'm also less confident in this company because two of its most senior managers, Peter Leparulo, chief executive officer and Dan Halvorson, the company's chief financial officer, both resigned within a year of each other. These men are credited with turning Novatel Wireless around during the difficult times and giving the company renewed direction. Without them at the helm, there is more concern about Novatel's leadership. The CFO quitting it is almost never a good sign.
In my experience, a changing of the guard in management usually precedes a round of write-offs and restructuring charges. In this way, the new team depresses results immediately, which can be attributed to the old guard, so in a year, when earnings are more normalized, they look like heroes.
With the stock up 170% in six months, the fundamentals are no longer as compelling as they were when I previously added shares of the stock to the portfolio. Back in October 2004, when I first added shares, Novatel had a price-to-earnings ratio of 31 and, adjusted for its growth rate, a price-earnings-to-growth ratio of 1.09.
Fast forward to December 2006, when I doubled down my position--the company wasn't even profitable. But based on the changes taking place at Novatel, I told my readers that I expected the company to turn the corner and to earn 44 cents per share in 2007, adjusted for cash, giving it a 2007 estimated P/E ratio of 34--in line with its historical range. The company did become profitable--today the PE ratio is 60, far higher than my expectations and overvalued, in my opinion. It also exceeds Sierra Wireless' P/E ratio of 47.
Another worry: Short interest in the company's stock is growing. In mid-April, the company had a short interest of 5.9 million shares. One month later, in mid-May, that was up to 7.3 million shares, or about 24% of the stock's float. Novatel operates in a fast-growing segment of the wireless market, and its business has great opportunities ahead. But its just too expensive at current levels.
I am still holding NVTL with strong hands; chart:
Thanks for your great posts nexta and la-onda :)
QuoteFast forward to December 2006, when I doubled down my position--the company wasn't even profitable. But based on the changes taking place at Novatel, I told my readers that I expected the company to turn the corner and to earn 44 cents per share in 2007, adjusted for cash, giving it a 2007 estimated P/E ratio of 34--in line with its historical range. The company did become profitable--today the PE ratio is 60, far higher than my expectations and overvalued, in my opinion. It also exceeds Sierra Wireless' P/E ratio of 47.
The only problem with this man's analysis is that NVTL is about to earn at least $1 per share in 2007, more than double what he was thinking.
According to the company's second quarter guidance (http://biz.yahoo.com/ap/070608/novatel_outlook.html?.v=1), I would say the company already made $0.58 GAAP EPS in the first half of the year, so the article is complete non-sense (even though it has some valid information).
I'll keep holding NVTL.
DJ Novatel Wireless Cut To Underweight At JP Morgan
.
(END) Dow Jones Newswires
July 31, 2007 05:47 ET (09:47 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 05 47 AM EDT 07-31-07 Not good .
These downgrades are a simple market manipulation. Those analysts are just waiting for their clients to get in before they upgrade the stock again. They figured buying at $29 was too high, hence the downgrades. I'll patiently wait this quarter through.
anyone buying some more just before earnings?
Quote from: berloga on July 31, 2007, 10:28:35 AM
These downgrades are a simple market manipulation. Those analysts are just waiting for their clients to get in before they upgrade the stock again. They figured buying at $29 was too high, hence the downgrades. I'll patiently wait this quarter through.
I agree berloga, that seems to be the case.
Today it was JP Morgan that downgraded NVTL:
NVTL: JP Morgan Cuts to Underweight from Neutral; Analyst Notes (http://www.knobias.com/story.htm?eid=3.1.48e7a3352d3a456c589849e2262d83de8d2b31d6087565ba2c7145fc1f5117d8)
Their reason:
«Analyst Comments: Guidance from Sierra Wireless (SWIR) and Option Wireless suggest channel selling is peaking. The firm believes
there is a risk of a slump in sales and margins, making shares fully valued at these levels.»
A risk of a slump in sales and margins? For mobile connection products?
I just don't see this happening. I believe mobile internet is just starting and it will be huge a couple of years from now.
I don't see anything wrong with SWIR's guidance, the company will grow revenues by roughly 100% from the year ago levels. Here's what SWIR's management said in Q2 earnings release:
«Looking forward, we expect that our rapid pace of new product introductions,
strong channel position and expansion of our newly acquired M2M business will drive continued revenue growth and improving profitability in the second half of 2007."»
I'll continue holding NVTL, despite the short term weakness.
Hi Gang:
Someone bought $10 Million (500k) shares of NVTL and 300k shares of SWIR right before 3pm today! I decided to pick up some more shares too.
Nothing has changed with these stocks at all over the past 2 weeks, except for the analysts comments, which we have seen are WAY off....
What a Tremendous Buying Opportunity here!!!!
Good Luck and Happy Trading
Bourbon ;D
Quote from: bourbonstreet_crawdaddy on August 01, 2007, 03:38:45 PM
Hi Gang:
Someone bought $10 Million (500k) shares of NVTL and 300k shares of SWIR right before 3pm today! I decided to pick up some more shares too.
Nothing has changed with these stocks at all over the past 2 weeks, except for the analysts comments, which we have seen are WAY off....
What a Tremendous Buying Opportunity here!!!!
Good Luck and Happy Trading
Bourbon ;D
I agree Bourbon :)
My take is NVTL is so good that a lot of influent people wanted to get in, but of course, because they have the power to shake weak hands, they took advantage of it and managed to get shares at a deep discount.
I don't remember paying anything to JP Morgan, for example, for advice on NVTL. And they're not JP Morgan by providing services for free. For the people that paid attention to their ridiculous research, there will be a price to pay, when they buy back their shares above $30.
This is my view of what is happening, but I can be wrong.
Anyway, NVTL is trading at about 1.5 times 2007 revenue, while it is growing revenues by about 100%. I don't think the revenue growth will stop, in fact, I think demand for the company's products is just starting to get traction. In a couple of years from now everybody will have mobile internet, instead of fixed internet, pretty much like the transition we've had from the fixed lines to the mobile phones.
The candlestick today was encouraging, despite the 3.2% fall.
I remain confident in NVTL's fundamentals (I wish they can expand net profit margin from the 8% level, that would increase its value a lot) and I expect the stock to close 2007 comfortably above $30.
Quote from: David Randolph on August 01, 2007, 05:46:10 PM
Quote from: bourbonstreet_crawdaddy on August 01, 2007, 03:38:45 PM
Hi Gang:
Someone bought $10 Million (500k) shares of NVTL and 300k shares of SWIR right before 3pm today! I decided to pick up some more shares too.
Nothing has changed with these stocks at all over the past 2 weeks, except for the analysts comments, which we have seen are WAY off....
What a Tremendous Buying Opportunity here!!!!
Good Luck and Happy Trading
Bourbon ;D
I agree Bourbon :)
My take is NVTL is so good that a lot of influent people wanted to get in, but of course, because they have the power to shake weak hands, they took advantage of it and managed to get shares at a deep discount.
I don't remember paying anything to JP Morgan, for example, for advice on NVTL. And they're not JP Morgan by providing services for free. For the people that paid attention to their ridiculous research, there will be a price to pay, when they buy back their shares above $30.
This is my view of what is happening, but I can be wrong.
Anyway, NVTL is trading at about 1.5 times 2007 revenue, while it is growing revenues by about 100%. I don't think the revenue growth will stop, in fact, I think demand for the company's products is just starting to get traction. In a couple of years from now everybody will have mobile internet, instead of fixed internet, pretty much like the transition we've had from the fixed lines to the mobile phones.
The candlestick today was encouraging, despite the 3.2% fall.
I remain confident in NVTL's fundamentals (I wish they can expand net profit margin from the 8% level, that would increase its value a lot) and I expect the stock to close 2007 comfortably above $30.
You'er definitely right David ...
Here in Kuwait more than 70% are using the mobile internet but the most popular aircards are Sierra's cards ..
Anyway .. I really expected NVTL to drop to at least $21.36 but it went further to $19.91 when it hit the Gap support today .. I knew this just when it broke the 25.62 but sometimes you can't imagine that a stronge stock can go down 30% in a week just because of a small downgrade ::)
for now I found out about an interesting thing .. look at the weekly chart below . are we going to make a cup with a handle ?
we can see it created a handle a long time ago on the left and went like a rock down almost lost 75% :o
and then it stayed in a tight range for one year and a half before it's broken up to a new all time high ...
Now it's forming the handle on the right side and the bottom was today at $19.91 probably will take a month or a little bit more to finish it .. after that the stock will shoot to the stars for at least $49 in a few months ;D
I could be wrong but technically it's very possible and David's fundmental analysis is supporting what I'm saying ...
we just need to wait and see ...
QuoteHere in Kuwait more than 70% are using the mobile internet but the most popular aircards are Sierra's cards ..
Well, I own Sierra too :)
70%? Are you sure Garoh, that seems like a lot (well, Koweit is a very rich country). If Koweit was the average I would say NVTL doesn't have all that much growth potential, because everyone that could buy, would have already bought. But I think that globally no more than 5% of people with internet have a mobile (not wireless, it's different) internet connection. But I expect this number to grow to 50% or more over the next couple of years ... (but I don't have the exact numbers, a nice research to do when I have some more time).
But, even when everybody has mobile internet, the business doesn't stop, because for more speed and reliability mobile operators need better cards and antennas, so NVTL will keep upgrading its products and costumers will keep buying.
Nice 5.9% bounce yesterday, I'll keep holding.
Quote from: David Randolph on August 03, 2007, 05:38:48 AM
QuoteHere in Kuwait more than 70% are using the mobile internet but the most popular aircards are Sierra's cards ..
Well, I own Sierra too :)
70%? Are you sure Garoh, that seems like a lot (well, Koweit is a very rich country). If Koweit was the average I would say NVTL doesn't have all that much growth potential, because everyone that could buy, would have already bought. But I think that globally no more than 5% of people with internet have a mobile (not wireless, it's different) internet connection. But I expect this number to grow to 50% or more over the next couple of years ... (but I don't have the exact numbers, a nice research to do when I have some more time).
But, even when everybody has mobile internet, the business doesn't stop, because for more speed and reliability mobile operators need better cards and antennas, so NVTL will keep upgrading its products and costumers will keep buying.
Nice 5.9% bounce yesterday, I'll keep holding.
David me too I have Sierra 850 :)
Yes I'm sure maybe even more than 70% , most of the people are going for Laptops and they are buying the wireless connection equipments from Sierra and Novetal ..
just fyi:
NVTL: To Release Q2 Results Aug 06 [AMC]
Friday , August 03, 2007 13:00ET
Novatel Wireless Inc (Nasdaq NM: NVTL) is scheduled to release its Q2 financial results on August 06, 2007, after the close of the market (AMC).
CONSENSUS ESTIMATES:
Q2 Revenue: $95.71 million
Q2 EPS: $0.30 per share
PREVIOUS PERIOD:
Prev Q2 Revenue: $45.65 million
Prev Q2 EPS: $0.02 per share
8) I am optimistic for todays Q2 results...
cheers
Oliver
Nice ;D
...even higher revenues than expected from their June updated guidance;D
Novatel Wireless Reports Strong Second Quarter Financial Results
Monday August 6, 4:15 pm ET
Revenue Grows 113% Year Over Year, Gross Margins Increase as Company Raises 2007 Guidance
SAN DIEGO--(BUSINESS WIRE)--Novatel Wireless, Inc. (Nasdaq:NVTL - News), a leading provider of wireless broadband access solutions, today reported financial results for the second quarter ended June 30, 2007.
ADVERTISEMENT
Revenue for the second quarter was up 113% to $97.4 million compared to revenue of $45.7 million reported in the same period last year. Second quarter GAAP net income was $8.0 million, or $0.25 per diluted share. This compares to GAAP net income of $95,000, or $0.00 per diluted share in the prior year period. 2007 second quarter GAAP results include approximately $1.8 million of non-cash share-based compensation, or $0.06 per diluted share, net of taxes. Excluding the effect of these charges, non-GAAP net income was $9.8 million or $0.31 per diluted share for the second quarter of 2007.
"Results for the second quarter 2007 continued to demonstrate that Novatel Wireless is executing ahead of plan and capitalizing on the growing worldwide demand for 3G wireless broadband access solutions," commented Brad Weinert, president of Novatel Wireless. "Demand is strong across a wide range of products including Ovation USB devices, Merlin PC and Express cards, and Expedite embedded modems. Adoption of USB wireless modems has been a primary growth driver with over $85 million in sales in the nine months since its introduction. In the second half, we will introduce a number of exciting new products, including our next generation USB devices, in both the U.S. and Europe. At the same time, we are investing in R&D efforts in a number of key areas, ranging from new software products to new technologies."
"Our business continues to show substantial improvement, with second quarter non-GAAP net income nearly doubling that of the full-year in 2006," added Mr. Weinert. "Based on the strength of our current demand and backlog, we are increasing our outlook for the year to between $415 million and $425 million in revenue and non-GAAP EPS in the range of $1.25 to $1.30. This compares to previous guidance of $380 to $390 million in revenue and non-GAAP EPS of $1.00 to $1.05, an upward revision of over 20% to annual EPS guidance overall."
Q3 and 2007 Outlook
The following statements are forward-looking and actual results may differ materially. Please see the section titled, "Cautionary Note Regarding Forward-Looking Statements" at the end of this press release for a description of risks. Please see the Company's quarterly and annual reports on file with the Securities and Exchange Commission (SEC) for a more detailed description of risk factors.
The following is a summary of the Company's financial guidance for the third quarter of 2007 and the year ending December 31, 2007. These estimates are based on the Company's current business outlook as of the date of this press release. Non-GAAP earnings per diluted share are based on a projected tax rate of 35% and exclude FAS 123R share-based compensation expenses.
Third Quarter Fiscal Year
2007 2007
------------- --------------
Revenue (in millions) $100.0 $415.0 - 425.0
GAAP Earnings Per Share, Diluted $ 0.23 $ 1.05 - 1.10
Adjustment:
Stock-based compensation expense, net
of income taxes $ 0.04 $ 0.20
------------- --------------
Non-GAAP Earnings Per Share, Diluted $ 0.27 $ 1.25 - 1.30
============= ==============
NVTL's 2nd quarter earnings and guidance were spectacular:
• Novatel Wireless Reports Strong Second Quarter Financial Results (http://biz.yahoo.com/bw/070806/20070806006089.html?.v=1)
Business Wire (Mon 4:15pm)
I especially enjoyed the expansion of the full year 2007 Non-GAAP EPS guidance, from $1.05 - $1.10 to $1.25 - $1.30:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39468;image)
My fundamental long term take on NVTL is: people can stop paying their credit card or mortgage debts (or at least take a lot less debt in the future), but they will always need an internet connection, and when comparing the fixed and the mobile alternatives, they will definitely go for the mobile, since it costs about the same and has a lot of advantages.
What could drag NVTL down would be an earnings multiple contraction, but since the company is more than doubling revenues, I believe it will always have an earnings multiple of two or three times the market average.
The market is responding well to the news, pushing NVTL up 8.6% in after hours trading.
I'll continue holding NVTL for the long term.
Every time NVTL reports earnings it raises guidance for the full year, and I still think they're being conservative. The market reacted positively to the good news, as it should. I believe NVTL will close 2007 above $30 and I'm happy I was able to resist the temptation of taking the biggest profit of the Main in the general market turmoil.
I'll continue holding NVTL.
What's going on with NVTL, it's tanking!? :'(
Quote from: berloga on August 08, 2007, 01:46:46 PM
What's going on with NVTL, it's tanking!? :'(
Nothing fundamentally, at least not that I know of. I guess the fall was because there was a gap opened between $21.87 and $22 and the stock went down to close it in its bottoming process.
I've heard the company's conference call, which was very long with many Q&A, so it was informative. Here are the notes I took from the CC:
- Gross margin was 31.7% (non GAAP);
- Operating margin was 14%;
- Share based compensation was $1.8 M for the quarter;
- Company sees further upside to revenues and EPS in the 4th quarter;
- WiMax is growth opportunity for NVTL, but expects revenues just in the 2nd half of 2008;
- According to management NVTL's USB products have higher margins than the ones from the competition;
- Europe has lower margins than the US, because there are more carriers there and distribution also costs more. But the company expects margins to improve in Europe as volume rises;
- 10% operating margin is the minimum that the company foresees;
- There have been 600 K to 700 K new shares per quarter, which means about 2.6 million new shares issued per year. Considering the current share count of 30,826,000, the dilution per year is 8.4%. I had just 6% in my valuation model, so let me increase the dilution factor to 1.084;
- There's a strong and renewed interest in 3G in the market place;
- The 4th quarter is seasonally the strongest to the carriers and NVTL;
- There are studies pointing that the company's market will grow at a compounded annual growth rate of 50% over the next 5 years.
Management also commented on the fact that even though its share price more than doubled over the past year, the P/E ratio is lower now. The general market probably won't help NVTL's stock, but I see the company's business being totally independent from the economic cycle, it's products are better substitutes of other products which are necessary for most people's everyday lives.
I have no doubts that NVTL's revenue and profit will be much higher two years from now than what they are now, so shares should and will probably go higher, even if the general market goes down.
I'll continue holding NVTL for the long term.
I think the general market will go down, but NVTL will go up anyway, because its growth is independent of the economic cycle. We just have some multiple compression putting pressure on NVTL, as even the CEO commented in the conference call, saying that despite the stock being up from the year ago levels, the P/E ratio is lower now.
Anyway, money will have to find a home somewhere, and I think people will pay up for reliability and growth visibility.
I'll keep holding NVTL.
Analysts update:
1)
Novatel Wireless "market perform"
Wednesday, August 08, 2007 6:58:00 AM ET
JMP Securities
NEW YORK, August 8 (newratings.com) - In a research note published yesterday, analyst Samuel Wilson of JMP Securities maintains his "market perform" rating on Novatel Wireless Inc (NVTL.NAS).
2)
Novatel Wireless "neutral," estimates raised
Wednesday, August 08, 2007 8:14:40 AM ET
Cowen & Co
NEW YORK, August 8 (newratings.com) - In a research note published yesterday, analyst Matthew Hoffman of Cowen & Co maintains his "neutral" rating on Novatel Wireless Inc (NVTL.NAS), while raising his estimates for the company.
3)
Novatel Wireless "hold," estimates raised
Wednesday, August 08, 2007 8:40:39 AM ET
Morgan Joseph & Co
NEW YORK, August 8 (newratings.com) - Analyst Kevin Dede of Morgan Joseph maintains his "hold" rating on Novatel Wireless Inc (NVTL.NAS), while raising his estimates for the company.
In a research note published yesterday, the analyst mentions that the company has posted robust 2Q results, with sales and non-GAAP EPS ahead of expectations. Novatel Wireless has issued healthy sales guidance for FY07 at $415-$425 million. The analyst believes that the company's bullish guidance was driven by the HSUPA sales in Europe, the improving sales of embedded modems and continued robustness in the Ev-Do sales in North America. The EPS estimate for 2007 has been raised from $1.20 to $1.28.
very conservative updates imho
chart update:
Quotevery conservative updates imho
Yeah, they keep raising their estimates but maintain the "hold" rating:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39626;image)
My view is estimates, especially for 2008, are too low. Analysts are expecting just 12% EPS growth in 2008, from $1.07 to $1.20. But there are studies saying the company's industry may grow 50% on a CAGR basis over the next five years - this means a total increase of 7.6 fold in the market size :o
NVTL's shares rose 6.1% on Friday, but we need some more advancing days for the chart to change from short term bearish to bullish. We'll see what the next few days bring, I'll keep holding NVTL.
QuoteNVTL's shares rose 6.1% on Friday, but we need some more advancing days for the chart to change from short term bearish to bullish. We'll see what the next few days bring, I'll keep holding NVTL.
NVTL started the day very well, but it couldn't hold on to its gains when the general market turned south by mid-session.
But long term fundamentals are supportive and independent of the economic cycle, so I expect the stock to push towards $30 and beyond when the current consolidation period ends.
Again, NVTL was doing well, but the general market jitters took it down 3% by the closing bell. The consolidation period continues, but over the long term, be it because the company's specific business grows despite the economic cycle, or because the general market remains long term bullish, I see NVTL closing 2007 around $30.
I'll keep holding NVTL for the long term.
There was a form S-8 filed with the SEC yesterda (http://www.sec.gov/Archives/edgar/data/1022652/000119312507183973/ds8.htm)y, with NVTL registering 2,268,000 new shares in connection with their previously approved employee stock options plan, so nothing unexpected.
NVTL has been falling with the general market trend, holding just a bit better than the S&P 500 over the last few days.
I have no changes to make to the specific company's outlook, so I'll keep on holding NVTL.
NVTL touched support and bounced a bit towards the end of the session. If I'm right about my general market outlook I'm sure NVTL will push higher again and be at $30 plus six months from now.
If I'm wrong ... well, I have no doubts NVTL's revenues and profits will still grow nicely. However a multiple compression could make it stay around current levels, if it were very dramatic. But let's not consider this for now.
I'll hold NVTL.
Director has sold 99000 shares:
http://www.secform4.com/insider-trading/1022652.htm
Assertion:
Whoever said it before was right on the money. It is clear that manipulation in the market occurs, whether intended or not, with thinly traded companies. Our purposes here on the board are to help each other, in a synergistic way, to become a strong resource of knowledge and thus better fundamentalists and technicians.
Proposition:
I believe that we should use the fundamental data we are analyzing, to identify possible buying opportunities when they present themselves. Some of the best opportunities arise when the inherent value of a company is much higher than the present market price, and where the possibility of future stock price appreciation in the future is high.
Case Study:
This is the case with NVTL. NVTL has doubled revenues and more than doubled net income Quarter to Quarter, and Year Over Year. The company is Most Importantly in a high growth industry, where the markets will quite possibly grow at a 50% CAGR for the next five years. The expansion of the Mobile Internet Card business is booming, and NVTL is the leader in that industry. NVTL is successfully achieving the goals that they lay out, and are intent on maximizing shareholder value through price appreciation. This is very important as well, in that they have built a long track record of making great decisions, and continue to do so.
Analysis and Outlook:
NVTL is introducing new product lines in the 2nd half of 2007 and early 2008, and is continuing to improve and expand their R&D into "new technologies", much like the improvement in the entire Mobile Internet Industry, and the current HIGH and expected HIGH growth rate in this niche. The Ovation product by NVTL opened up with over $85 million in sales alone in its first year on the market, with sales growing very rapidly in response to everyone's need / choice to bring Everything Everywhere Mobile, including voice, TV, Data, and Internet. NVTL's current products allow each person the portability to plug in a USB Modem anywhere they are, bringing the Internet to the user with Broadband speeds. NVTL is an exciting investment, and will most likely post $1 EPS in 2007, and $2 EPS in 2008; both of which are extremely conservative in my opinion. This means that around $20 right now, the company is selling at a current PE of 20 ($20/$1=20) , and a forward PE of 10 ($20/$2=10)
Conclusion:
With NVTL growing in excess of 100% on a Quarterly basis, the valuation is plain dumb, extremely low, and is currently in a multiple contraction period. As soon as the multiple expands to a reasonable level, the stock will explode upward possibly $10 to $20 or more, within a short (couple month) period.
NVTL is a true Jewel, A High Growth Company with a management team that is truly excellent in many ways. In the way I choose to see the situation, the past has been good, the current is better, and the future will be The Best!! NVTL is a rocket ride that has enough fuel for several years, until the needs of the remaining 90% of the market that does not currently have Mobile Internet are filled. The tremendous opportunity is here, Right Now, and we can choose to take advantage of it, with a potential to see NVTL's shares zoom to $60 from below $25, in the Short-Term, and much, much higher in the next 3 to 5 years.
Good Luck to all Longs, and Enjoy the Ride... I know I will!
Go NVTL!!
Bourbon ;Dds a
Thanks for your NVTL analysis Bourbon :)
I agree with you, but I choose not to be as enthusiastic, or else people would feel (even more) disappointed if things don't come out as we expect. Or they would start counting the money, considering it as "cash in the pocket", and would feel disappointed even if the expectation turned into reality.
But I welcome your optimistic view, great read :)
NVTL just issued a press release:
• Junxion Releases First GPS-Enabled Remote Management Solution for Cellular Routers (http://biz.yahoo.com/bw/070820/20070820005325.html?.v=1)
Business Wire (Mon 7:00am)
It seems the nascent GPS equipment industry (for cars, for example) won't go far, because we'll have GPS in our mobile phones.
NVTL is still going through what I think is a consolidation phase, but I expect it to make a bullish breakout above $23.26 and head higher towards the end of the year.
I'll keep holding NVTL for the long term.
this are the reasons why we are invested in NVTL ;)
cheers
Oliver
presentation for downloading, summarization & chart 8)
all the best >:D
Awesome presentation, thanks for bringing it to our attention la-onda (applaud) :)
I especially enjoyed the second slide, showing the expected unit shipments growth with a 53% CAGR between 2006 and 2012 :o
Technically NVTL continues to consolidate within the $19.91 - $23.26 range. I expect the stock to move towards $30 plus by year's end.
I wonder if "decreasing operational costs" and "leveraging business model for continuous growth" ...
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39826;image)
... means "operating margin will expand". That would be great and would surely help the stock make another bull run.
I'll keep holding NVTL.
I wonder how big this competition is to NVTL and SWIR...
http://www.digifon.ca/index.php
They make USB modems as well, I guess, judging at their website. It seems after the numerous downgrades and the market jitters NVTL has been very sluggish. It has moved against SWIR, which was boosted by the positive comments. Should we protect our gain somehow if NVTL should break an important technical ground on the downside? Especially if the stocks continues sliding while the tech market moves up?
QuoteI wonder how big this competition is to NVTL and SWIR...
http://www.digifon.ca/index.php
They make USB modems as well, I guess, judging at their website.
In every industry there are competitive threats, however NVTL is the market leader and it will benefit the most from the market's expansion:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39860;image)
QuoteIt seems after the numerous downgrades and the market jitters NVTL has been very sluggish. It has moved against SWIR, which was boosted by the positive comments.
Well, yesterday NVTL rose 7.5%, against 2.7% for SWIR and 1.16% for the S&P 500, so I guess your worries have subsided now.
QuoteShould we protect our gain somehow if NVTL should break an important technical ground on the downside? Especially if the stocks continues sliding while the tech market moves up?
"Protection" was what got me out of SILC with an horrible timing. "Protection" could have thrown me out of GIGM below $10. My take is you can't protect, you either believe fundamentals or you don't. "Protection" given by stop losses or trailing stop losses is an illusion in my current view (I thought differently a few years ago).
Hold for as long as you trust the fundamentals and sell when you don't trust them anymore, regardless of your buying price. Don't let the market tell you what to do about your investments, or else you won't be thinking about your investments, but thinking about what others are thinking, not knowing what you're doing and getting very confused in the process. You be the judge.
NVTL did very well yesterday, even making a bullish breakout of a possible short term descending trendline. A bullish breakout of the $23.26 resistance level is within reach.
I trust the 53% CAGR projected for the company's products, between 2006 and 2012. I'll continue holding NVTL for the long term.
Quote from: David Randolph on August 23, 2007, 05:49:39 AM
Hold for as long as you trust the fundamentals and sell when you don't trust them anymore, regardless of your buying price. Don't let the market tell you what to do about your investments, or else you won't be thinking about your investments, but thinking about what others are thinking, not knowing what you're doing and getting very confused in the process. You be the judge.
Hello Board Members,
I think David is hitting the nail right on the head, and I believe that brokers play a game with the general public. Look back at 10/26/06 last year, when Morgan Joseph, the same broker that covers NVTL now, had this to say:
<<NEW YORK, October 26 - Analysts at Morgan Joseph reiterate their "buy" rating on Novatel Wireless Inc (NVTL), while reducing their estimates for the company. The target price has been reduced from $17 to $15.
In a research note published yesterday, the analysts mention that the company has issued robust revenue guidance for 4Q06 of $61-$63 million on account of impressive execution on new product introductions. There is limited upside potential to Novatel Wireless' gross margins in the near term on account of increased product launch costs and component shortages, the analysts add. The EPS estimates for 2006 and 2007 have been reduced from $0.03 to -$0.04 and from $0.24 to $0.17, respectively.>>
This was the day that the current bull run in NVTL started - when the stock closed at $8.44!! LOL The "analyst" reduced his estimate for 2007 to $0.17 !!! Give me a break!
What the brokers do is downgrade their recommendation, tell their customers to load up, then release another "analysis" with a "buy" recommendation - so that the general public pushes up the shares that their clients loaded up on.
What did we hear from the same firm earlier this month on 8/8/07 - when the stock closed at $22.06?
<<NEW YORK, August 8 - Analyst Kevin Dede of Morgan Joseph maintains his "hold" rating on Novatel Wireless Inc (NVTL), while raising his estimates for the company.
In a research note published yesterday, the analyst mentions that the company has posted robust 2Q results, with sales and non-GAAP EPS ahead of expectations. Novatel Wireless has issued healthy sales guidance for FY07 at $415-$425 million. The analyst believes that the company’s bullish guidance was driven by the HSUPA sales in Europe, the improving sales of embedded modems and continued robustness in the Ev-Do sales in North America. The EPS estimate for 2007 has been raised from $1.20 to $1.28. >>
He RAISED estimates, but not his recommendation.... Despite the fact that the industry will grow 6X to 8X in the next 5 years, and NVTL has more than 50% market share in the Embedded Modules Segment - the segment that will most likely have the most growth.
How Fitting! Now, let's wait until the stock runs up 50%, then release another "analysis" for the general public consumption.
Wait, let me guess, it will be a "Strong Buy" when the stock is trading at $30-35..... and History repeats itself again!
Dont Believe the Hype People. Be Smart - Buy NVTL and SWIR before they reach $50!
Best of Luck to all Longs!!
Bourbon ;D
Thanks a lot for your retrospective analysis on NVTL Bourbon. It goes to show the remarkable fundamental improvement the company had in a short period of time:
QuoteThis was the day that the current bull run in NVTL started - when the stock closed at $8.44!! LOL The "analyst" reduced his estimate for 2007 to $0.17 !!! Give me a break!
They thought $0.17, now we know it will be more than $1 (the company's guidance is about $1.07). When they thought $0.17, as you say the stock was at $8.44. The forward earnings multiple back then was 50. Now it is 22, so the stock is actually much cheaper now relative to perceived fundamentals.
And what if instead of the $1.2 EPS analysts estimate for 2008, the company earns $2 or more? That has been the fundamental trend. As you say, the stock would approach $50.
Technically we closed yesterday right at resistance. I don't know if the stock will breakout or not but I'll keep holding NVTL for the long term.
just fyi:
NVTL: Short Interest UP 19.4% to 8.7M in Aug 2007
Friday , August 24, 2007 16:19ET
According to new short interest data from NASDAQ, short interest for Novatel Wireless Inc (NasdaqNM: NVTL) INCREASED 19.4% to 8,657,012 shares for the month ended mid-August, 2007.
SYMBOL JULY AUGUST CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NVTL 7,251,835 8,657,012 +1,405,177 +19.38% 5
Based on NVTL's 20-day average daily share volume of 1,848,325, it would require approximately 5 day(s) of buying to cover this short interest.
chart:
Here's a little technical update for NVTL:
Friday's session was not very volatile but NVTL manage to close above the $23.26 resistance, top of the recent trading range. Looking to the DMI, momentum is improving and taking in consideration the recent breakouts (descending line plus $23.26 plus ema-50) we may watch a further upside continuation in the short term.
Portfolio Instructions:
Hold NVTL
Best regards,
Chart Update:
A Negative session for NVTL which is trading below the $23.26 resistance again. At this reference level it's normal to watch a step back, especially with also a negative session for the general market.
Portfolio Instructions:
Hold NVTL
Regards,
Chart update:
With today's market action NVTL had no chance to retest the resistance level and is now once again below the EMA-50.
Portfolio Instructions:
Hold NVTL
Regards,
Chart update:
NVTL is testing the resistance once again, and closing above the EMA-50. If we have a continuation candle we may see some upside soon ;)
Portfolio Instructions:
Hold NVTL
Regards,
Quote from: Garoh on August 01, 2007, 09:01:30 PM
Quote from: David Randolph on August 01, 2007, 05:46:10 PM
Quote from: bourbonstreet_crawdaddy on August 01, 2007, 03:38:45 PM
Hi Gang:
Someone bought $10 Million (500k) shares of NVTL and 300k shares of SWIR right before 3pm today! I decided to pick up some more shares too.
Nothing has changed with these stocks at all over the past 2 weeks, except for the analysts comments, which we have seen are WAY off....
What a Tremendous Buying Opportunity here!!!!
Good Luck and Happy Trading
Bourbon ;D
I agree Bourbon :)
My take is NVTL is so good that a lot of influent people wanted to get in, but of course, because they have the power to shake weak hands, they took advantage of it and managed to get shares at a deep discount.
I don't remember paying anything to JP Morgan, for example, for advice on NVTL. And they're not JP Morgan by providing services for free. For the people that paid attention to their ridiculous research, there will be a price to pay, when they buy back their shares above $30.
This is my view of what is happening, but I can be wrong.
Anyway, NVTL is trading at about 1.5 times 2007 revenue, while it is growing revenues by about 100%. I don't think the revenue growth will stop, in fact, I think demand for the company's products is just starting to get traction. In a couple of years from now everybody will have mobile internet, instead of fixed internet, pretty much like the transition we've had from the fixed lines to the mobile phones.
The candlestick today was encouraging, despite the 3.2% fall.
I remain confident in NVTL's fundamentals (I wish they can expand net profit margin from the 8% level, that would increase its value a lot) and I expect the stock to close 2007 comfortably above $30.
You'er definitely right David ...
Here in Kuwait more than 70% are using the mobile internet but the most popular aircards are Sierra's cards ..
Anyway .. I really expected NVTL to drop to at least $21.36 but it went further to $19.91 when it hit the Gap support today .. I knew this just when it broke the 25.62 but sometimes you can't imagine that a stronge stock can go down 30% in a week just because of a small downgrade ::)
for now I found out about an interesting thing .. look at the weekly chart below . are we going to make a cup with a handle ?
we can see it created a handle a long time ago on the left and went like a rock down almost lost 75% :o
and then it stayed in a tight range for one year and a half before it's broken up to a new all time high ...
Now it's forming the handle on the right side and the bottom was today at $19.91 probably will take a month or a little bit more to finish it .. after that the stock will shoot to the stars for at least $49 in a few months ;D
I could be wrong but technically it's very possible and David's fundmental analysis is supporting what I'm saying ...
we just need to wait and see ...
Hi
Look at this post Reply #236 on: 02 August 2007
look at the weekly chart I drew .. it looks like it is forming the handle now :)
I still this would be the case and we'll see high prices in the medium term ...
I also bought Call options for January 2008 strike 30 .. it's a good chance for at least 400% profit ;D
Ramsburg you'er doing great work ... thanks
QuoteI also bought Call options for January 2008 strike 30 .. it's a good chance for at least 400% profit ;D
Hi Garoh, I'm quite bullish on NVTL but I wouldn't buy and will never buy or sell options again, because they're too risky and I believe everybody loses in that game over the long term. Anyway, good luck :)
Since my last update there weren't any news out or any new technical developments. I'll keep my focus on the following projection ...
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39817;image)
... and will continue holding NVTL for the long term.
Anyone know why nvtl is having such a nice day today? Havn't seen any news. Enjoying it nevertheless.
Quote from: soxguy on September 05, 2007, 01:24:40 PM
Anyone know why nvtl is having such a nice day today? Havn't seen any news. Enjoying it nevertheless.
I don't see any particular reason soxguy, other than the stock being undervalued.
There were two SEC forms filed yesterday, but none of them were significant.
After several days of below average volume and relative weakness, NVTL shot up on strong volume and closed clearly above its key short term resistance level, at $23.26. This time we've had relative strength. So, does relative strength or weakness tell you much about the future? Not really, at least not on a day to day basis.
Still on the technical side, we now have to surpass the 50 days SMA (standing at $24.02) to clear the way for a move towards $30. I think this is what will ultimately happen, given the fundamentals.
QuoteStill on the technical side, we now have to surpass the 50 days SMA (standing at $24.02) to clear the way for a move towards $30. I think this is what will ultimately happen, given the fundamentals.
Ok, NVTL closed just above the 50 days SMA resistance level. The market is proving all the sellers between $19.91 and 23.36 wrong and NVTL looks set to push towards $30 and beyond.
I've seen my NVTL profit cut in half and still held because I trust the fundamentals of the company and expect to earn a lot more than 100% holding this stock for the long term.
Tech Beat: Novatel, Sierra
Andrea Orr | Sep 07, 2007 6:29am EDT | User Rating N/A
Even in today's world of ubiquitous mobile communications, it may be hard to comprehend the magnitude of the wireless industry. During the second quarter of 2007 alone, some 270.9 million mobile phones were sold around the world, according to recent data from Gartner Inc. Today, there are about 2.88 billion mobile subscribers worldwide.
Those phones are becoming more and more advanced. Consumers are increasingly purchasing phones based on third generation, or 3G technology, which, in addition to enabling voice communications, offers ways to swiftly send text, images, and video.
Today there are about 470 million 3G mobile subscribers in the world, representing only a small fraction of total mobile phone users. But the 3G user base is growing rapidly.
Apple Inc.'s (Nasdaq: AAPL) iPhone, which looks more like a tiny television than a telephone, illustrates the trend well. One reason the $600 phone, er $400 phone is so popular is because of its video and other rich-media capabilities.
Other mobile device makers and PC makers are moving in the same direction, adding more functions to their wireless products so that people can not just carry a conversation but accomplish some serious work – or play – remotely.
The trend is reflected in stock values. In the wireless sector there is one, and depending on what date you use to make the comparison, maybe two stocks that have doubled in the past year. Both companies, which make wireless cards and modems to enable 3G mobile communications, are rapidly growing their revenues and signing up new customers.
Sounds good for new investors, yes? Well, maybe not so much, at least as far as Novatel Wireless Inc. (Nasdaq: NVTL) and Sierra Wireless Inc. (Nasdaq: SWIR) are currently concerned.
San Diego, Calif.-based Novatel has seen its revenues more than double in two years on brisk demand for its wireless cards, which support communications at the personal as well as the enterprise level. The company had revenues of $218 million in 2006, up from $161.7 million in 2005 and $103.7 million in 2004.
Novatel has long been profitable but in fiscal 2006 it showed an operating loss and a slim net profit of just $443,000, well below the $11.1 million profit reported in 2005. That drop partly reflected a sharp increase in its R&D and sales and marketing spending.
Investors did not seem to mind. Novatel's shares are trading around $23.50 at present, up from $9.75 at the start of the year and $11.28 this time last year.
Indeed, net income is growing again. In August, the company reported second-quarter earnings of $8 million, compared with a breakeven quarter a year earlier. Revenues more than doubled to $97.4 million.
With the release of its second quarter report, the company boosted full year forecasts, saying it now expects revenues of $415 million to $425 million, compared with previous forecasts of $380 million to $390 million, and sees net income of $1.25 to $1.30 per share, compared with its earlier forecast of $1.00 to $1.05.
Is there anything not to like here? Some analysts think so.
In July J.P. Morgan downgraded Novatel to underweight from neutral and JMP Securities cut its rating on the stock to market perform from market outperform. In August, JMP reiterated that rating, citing some hidden problems in Novatel's generally strong second quarter report.
JMP analyst Sam Wilson noted that Novatel's second quarter domestic revenue fell 14% from the first quarter, partly resulting from one of its largest customers, Sprint, pulling orders in anticipation of the release of Novatel's new and improved wireless card. Although that new modem is due to be available this month, Wilson cautioned that Novatel could face further volatility during future upgrade cycles.
This is hardly the story of a distressed stock. Some 15 analysts who follow the company are forecasting revenues this year of $419.6 million, and $497.2 million next year, up sharply from $218 million in 2006. Some 13 analysts providing earnings forecast are on average projecting that earnings this year will dip to $1.07 per share, from $1.11 last year, before growing to around $1.20 per share in 2008.
Even Wilson has a $27.50 per share price target on Novatel and says he is bullish on the 3G wireless card market in the long term. But despite recent weakness that has brought the stock down from a 52-week high of $29.14, he warns that there could be more volatility in Novatel's stock price.
Investors looking for value should sit this one out, at least at current prices.
One of Novatel's key rivals is Sierra Wireless, a Richmond, British Columbia, company that makes the same type of cards to support wireless voice communications and data transfer on cell phones, laptops and even automobile communications systems.
Sierra's stock has just about doubled over the past year. Today it sells for around $23.00 per share, up from $13.63 at the start of the year and $11.45 a year ago.
The company's financial performance has been a bit spottier than Novatel's. Its 2005 revenue fell to $107.1 million from $211.2 million in 2004, but then rebounded to $221.3 million in 2006. Net income followed a similar path. The company was profitable in 2004 and 2006, but lost money in 2005. Its 2006 net income, also impacted by aggressive investments, was $9.8 million, compared with $24.9 million two years earlier.
Now the company seems to be in a period of smoother sailing. After reporting sharply higher second quarter sales and income, Sierra said that third quarter results would comfortably surpass the prevailing analyst forecasts at the time.
Eighteen analysts follow Sierra and on average they are forecasting net income growing to $1.02 per share this year and $1.25 per share in 2008, versus $0.38 last year. They expect revenues to total $416.7 million this year, and grow to $498.9 million next year, compared with $221.3 million last year.
Unlike Novatel, which suffered some key executive departures over the past year, Sierra has been able to focus on its business with minimal distractions and in June even acquired a rival business, Airlink Communications Inc., for $37.9 million.
That deal, along with the overall growth potential of the wireless industry in June prompted CIBC World Markets analyst Ittai Kidron to upgrade the stock to "sector outperform" from "sector perform."
"We see Sierra as an excellent and pure play way to tap into the positive outlook for 3G in 2007 and beyond," Kidron wrote in a research report in late July, when he raised his price target on the stock to $30 from $28.
In August, JMP Securities upgraded the stock to "strong buy" from "market perform."
Novatel and Sierra are definitely companies to watch closely – from the sidelines. Considering the big run these stocks have already seen, it's not the ideal time to buy.
QuoteNovatel and Sierra are definitely companies to watch closely – from the sidelines. Considering the big run these stocks have already seen, it's not the ideal time to buy.
I strongly disagree with this view.
The big run happened because fundamentals improved a lot ... in fact, they improved more than the stock prices rose, making the companies more undervalued now than what they were when trading 50% below current levels.
NVTL declined a bit in tandem with the general market, touching its $23.36 prior resistance level, now support. I expect the stock to close the year above $30 and I'll keep holding it.
NVTL is still consolidating just above its previous $23.26 resistance level. The uptrend should resume soon. But, whatever happens to the chart over the short term, I'll keep holding NVTL, because I agree with the study that says that demand for the company's products will grow at a 53% compound annual growth rate between now and 2012.
Good news out for NVTL:
• Telefonica Moviles Espana Introduces Next Generation Novatel Wireless MC950D HSUPA USB Mobile Data Modem (http://biz.yahoo.com/bw/070911/20070911005308.html?.v=1)
Business Wire (Tue 8:00am)
Telefonica is big, it has 206 million costumers.
We've had that press release from NVTL ...
Quote from: David Randolph on September 11, 2007, 10:41:22 AM
Good news out for NVTL:
• Telefonica Moviles Espana Introduces Next Generation Novatel Wireless MC950D HSUPA USB Mobile Data Modem (http://biz.yahoo.com/bw/070911/20070911005308.html?.v=1)
Business Wire (Tue 8:00am)
Telefonica is big, it has 206 million costumers.
... which helped fuel a 3.65% rally. We're back above the 50 days SMA, so that's losing technical significance.
Analysts estimates for 2008 still seem quite conservative:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40290;image)
Just $1.2 EPS, versus $1.07 in 2007, that is, about 12% growth. If you believe the following, like I do:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39817;image)
... then you must see $1.2 as ridiculously low. Analysts will probably raise their estimates a lot when they really start looking into 2008. And that's going to put the stock above $30, in my view.
NVTL has been weak over the last couple of days but there weren't any news or fundamental justification for that. I guess it's just the usual back and forth action before a big FED meeting, over the short term.
Over the long term we've already seen that the cellular wireless modems shipments are expected to grow at a CAGR of 53% until 2012, so NVTL will keep growing revenues and profits a lot, and that ultimately will be translated into higher prices for the stock.
I'll hold NVTL.
NVTL has been nervous, in tandem with the general market. I think people have been bailing out before the meeting, and we have a setup for a powerful rally later in the day. We'll see.
NVTL continues to trade around $23.26, without definition, but I expect this to change as analysts start revising upwards their 2008 estimates. I'll continue holding NVTL.
NVTL update:
NVTL: To Present At Merriman Curhan Ford Conference @ 15:45 ET
Tuesday , September 18, 2007 14:02ET
Company representatives of Novatel Wireless Inc (NasdaqNM: NVTL) will be presenting at the Merriman Curhan Ford 4th Annual Investor Summit today. The Company's presentation is scheduled to begin at 15:45 ET.
please listen carefully ;)
link:
http://wsw.com/webcast/mcm7/nvtl/
cheers
Oliver
highlights from updated conference presentation ;)
also added as download 8)
Thanks for reminding us of the Merriman Curhan conference la-onda :)
I just heard it and understand why NVTL had such a great run yesterday, and it wasn't just because of the FED rate cut.
The CEO reaffirmed the expected 50% CAGR expected for years to come and said something that I thought was really special, which was that carriers are starting to see people using NVTL's products and their service as their primary internet connection solution, substituting the fixed lines, ADSL, cable and so on. Remember we've talked about this emerging trend?
Of course, if one can have mobile for the same price and quality as fixed, why should he settle for a fixed connection? As it happened with mobile phones substituting fixed line phones I expect the same thing to happen to mobile vs fixed internet connection.
The man also reaffirmed guidance and there were some fears in the market that the company could disappoint, because of a Sprint delay or whatever. La-onda's post in SWIR's thread explains it better.
NVTL is truly set to push towards $30 before the year's end, but even better, it is set to grow immensely over the next 5 years or so.
I'll keep holding NVTL for the long term.
Up 8% in one day, down 2.2% the next day ... and I expect NVTL to move beyond $30 with this two steps forward, one step back type of behavior. When analysts start looking into 2008 estimates they'll see that what they have, $1.2 EPS representing 12% growth, is too low. Most studies indicate the industry will grow by about 50% a year for years to come, and this is in tandem with what I've been seeing in the "main street".
I'll keep holding NVTL.
Novatel Wireless upgraded to "hold"
Monday, September 17, 2007 9:03:31 AM ET
Matrix Research
NEW YORK, September 17 (newratings.com) - In a research note published on September 14, analysts at Matrix Research upgrade Novatel Wireless Inc (NVTL.NAS) from "sell" to "hold."
I can´t find the sell recommendation from Matrix anymore ;D
Thanks for the info la-onda :)
Bears on NVTL are a bit of a pain, when it seems so obvious that the mobile internet connection solution will continue to grow at a torrid pace. I guess today's sellers will be buying back the stock when it breaks $30 on the upside.
I'll keep holding NVTL for the long term.
I guess investors need to see some sequential growth to believe NVTL's long term growth story. I think the lack of growth from the 1st quarter is due to the very big jump the company's revenues had a few quarters back ... revenue jumped 40% sequentially in Q4 2006 and jumped another 42% sequentially in Q1 2007. This is a lot higher than the long term average and may have caused some inventory build up by NVTL's costumers.
So there wasn't any revenue growth in Q2 2007 and there won't be any growth in Q3 2007. However, probably in Q4 we're going to see another big jump in orders ... as I look to the fundamental data trends I see some seasonality, it appears to me the 4th and 1st quarters are the strongest of the year.
I believe the company's industry will grow by an average of 50% a year for years to come. I'll keep holding NVTL for the long term.
Unless NVTL raises guidance, which I only expect when the company reports 3rd quarter results in mid November, the stock is heavily dependent on the general market direction, because it only moves on a multiple contraction or expansion.
The general market went down for three days in a row and so did NVTL. I think today's open will be the short term bottom for the S&P 500 and the market is set to rally big, so I expect NVTL to follow suit.
Anyway, even if my short term prediction is wrong, I'll keep holding NVTL due to its outstanding fundamental trends, which I see continuing for years to come.
fyi:
NVTL: Short Interest UP 6.0% to 9.2M in Sep 2007
Tuesday , September 25, 2007 16:19ET
According to new short interest data from NASDAQ, short interest for Novatel Wireless Inc (NasdaqNM: NVTL) INCREASED 6.0% to 9,177,753 shares for the month ended mid-September, 2007.
SYMBOL AUGUST SEPTEMBER CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NVTL 8,657,012 9,177,753 +520,741 +6.02% 13
Based on NVTL's 20-day average daily share volume of 760,770, it would require approximately 13 day(s) of buying to cover this short interest.
It felt good to have some upside action on NVTL yesterday, we'll see if it gets some traction ... looking at the chart it doesn't look like it, but we know we can't trust "these looks". Everyday there's a new message from the short term chart, and many times the message is wrong.
The message from the fundamental trends and outlook is crystal clear: NVTL will go higher over the long term as its business keeps growing. I'll hold NVTL for the long term.
Quotelooking at the chart it doesn't look like it, but we know we can't trust "these looks". Everyday there's a new message from the short term chart, and many times the message is wrong.
Well, we've had some upside continuation in NVTL. It seems the $24.9 resistance is in play now. The short term support stands around $22.5. I'm confident NVTL will make a bullish breakout and push towards $30, even if not today.
http://www.marketwatch.com/news/story/verizon-wireless-offers-industry-first/story.aspx?guid=%7bDEEABEE3-952A-4A5E-887C-9C737080BD92%7d&print=true&dist=printTop
Verizon Wireless Offers Industry First: USB Wireless Broadband Modem With Integrated Data Storage
Last Update: 8:30 AM ET Sep 27, 2007
BASKING RIDGE, N.J. and SAN DIEGO, Sept 27, 2007 /PRNewswire via COMTEX/ -- Verizon Wireless, the leading wireless company with the nation's most reliable wireless voice and data network, today announced the availability of the USB727 Modem. Developed by Novatel Wireless (NVTL) , a leading provider of wireless broadband solutions, and carrying the distinction of being the world's smallest Evolution-Data Optimized (EV-DO) Revolution A (Rev. A) modem stick, the USB727 features an integrated microSD(TM) slot, allowing for the seamless storage and transport of up to 4 GB of files, photos or videos. Customers may purchase the USB727 Modem today online at http://www.verizonwireless.com and through Verizon Wireless' business sales channels. USB727 Modem will be in Verizon Wireless Communications Stores including those in Circuit City on October 5.
The USB727 is designed to work with any computing device equipped with a Type A USB port -- including most desktops, notebooks, and tablet PCs -- and provides on-the-go access to Verizon Wireless' national high-speed wireless broadband network. With out-of-box support for most operating systems, including Windows(R) (Vista, XP, 2000), Mac(R) and Linux, the USB727 enables Verizon Wireless customers to stay connected to online resources with speeds and performance similar to those of traditional cable or DSL connections.
The USB727 is optimized for Verizon Wireless' EV-DO Rev. A network and the company's BroadbandAccess service which provides average download speeds of 600 kilobits per second (kbps) to 1.4 megabits and average upload speeds of 500-800 kbps. Verizon Wireless customers with the USB727 can download a 1 Megabyte e-mail attachment -- the equivalent of a small PowerPoint(R) presentation or a large PDF file -- in about eight seconds and upload the same-sized file in less than 13 seconds.
Designed to be extremely durable and fit comfortably in any pocket, the USB727 combines a variety of innovative features into its tiny form factor, including an integrated dual-band diversity antennae system with flip-up antennae to maximize data speed performance and provide a strong network signal reception. VZAccess Manager Software is included to simplify set-up and navigation through the USB727's features.
Pricing and Availability
The USB727 is available at $149.99 after a $50 mail-in rebate and new two- year agreement. Customers can get BroadbandAccess service for Internet browsing, e-mail and intranet access for $59.99 monthly access with a new one- or two-year customer agreement. Business customers may contact a Verizon Wireless Business Sales Representative directly at 1-800-VZW-4BIZ.
For more information about Verizon Wireless products and services, visit a Verizon Wireless Communications Store, call 1-800-2 JOIN IN or go to http://www.verizonwireless.com.
Thanks JKN :)
NVTL issued two press releases yesterday but both failed to inspire buyers, as the stock continues stuck in a tight trading range:
• Verizon Wireless Offers Industry First: USB Wireless Broadband Modem With Integrated Data Storage (http://biz.yahoo.com/prnews/070927/nyth019.html?.v=101)
PR Newswire (Thu 8:30am)
And there was another press release, this coming out from Sprint, at 12:41 which wasn't posted on Yahoo Finance, let me check Market Watch ... nope. Strange, I have it on my news service, but can't post a link because it is a Java application.
I'll copy/paste it later if it's not published on Yahoo.
Anyway, nothing changed on the stock or fundamentals, I'll keep holding NVTL for the long term.
Here is the news from Sprint that you mentioned:
Sprint Expands Mobile Broadband Portfolio with Novatel Wireless 2-in-1 USB Modem
12:41p ET September 27, 2007 (Business Wire)
Sprint (NYSE:S) and Novatel Wireless, Inc., (Nasdaq:NVTL) a leading provider of wireless broadband solutions, today announced the commercial availability of the Ovation(TM) U727 USB Modem. Carrying the distinction of being the world's smallest EV-DO Rev. A modem stick, the Ovation U727 features an integrated microSD(TM) slot, allowing for the seamless storage and transport of up to 4GB of files, photos or videos.
The Ovation U727 is designed to work with any computing device equipped with Type A USB ports, including most desktops, notebooks, tablet PCs and PDAs, to provide instant on-the-go mobile broadband access. With out-of-box support for a variety of operating systems including Windows(R) (Vista, XP, 2000), Mac OS(R) X and Linux, the Ovation U727 enables users to surf the Web, check email and access important business documents with speeds similar to those of a cable or DSL connection.
"Mobile professionals and consumers alike want to make the most out of whatever equipment they carry and Sprint customers get maximum value from the Ovation U727 which delivers both high-speed access via the Sprint Mobile Broadband Network and the ability to store and access documents and other critical information," said Danny Bowman, vice president of customer equipment for Sprint. "A smaller form factor, GPS locate-and-find capabilities and newly available support for the Linux platform truly help make this a next-generation connectivity device for our customers."
Optimized for the Sprint Mobile Broadband Network, the Ovation U727 supports EV-DO Rev. A technology where available providing average download speeds from 600 kbps to 1.4 Mbps (with peak speeds of 3.1 Mbps) and upload speeds from 350 to 500 Kbps (with peak speeds of 1.8 Mbps), offering users unprecedented performance and notably faster speeds than legacy mobile data modems. The Ovation U727 is also backwards compatible for EV-DO Rev. 0 and 1XRTT technology in areas where EV-DO Rev. A coverage is not yet available.
"Novatel Wireless and Sprint have worked closely to develop mobile broadband solutions that meet the everyday needs of the end user," said Brad Weinert, president, Novatel Wireless. "With the launch of the Ovation U727, Sprint customers can now take full advantage of the next-generation speed and functionality of the Sprint Mobile Broadband Network."
Featuring an extremely durable design and remarkably small form factor, the U727 combines a variety of innovative features, including an integrated dual band diversity antennae system with flip-up antennae to maximize data speed performance and provide for stronger network signal reception. Sprint Mobile Broadband Lite Manager Software is included to simplify set-up and navigation through the vast feature set of the Ovation U727, eliminating the need to install drivers from a CD when using the Windows platform.
Beginning next month, the U727 will be sold through Sprint indirect and business sales channels and online at www.sprint.com for a suggested retail price of $279.99 and as low as $79.99 with a two-year subscriber agreement and mail-in-rebate. Sprint retail stores will begin offering the device later this year. Service plans for the card currently range from $39.99 per month for 40 MB to $79.99 per month for unlimited data usage. Customers signing a two-year subscriber agreement will be eligible to receive unlimited data usage for $59.99 per month (no separate voice plan required).
Thanks berloga :)
It seems the press release didn't do much to prevent NVTL from falling 3.5% on Friday's session. I think NVTL has been anticipating what the general market will do, however with a higher beta. Or else it is just trading within a tight trading range, and we know how relative strengths and weaknesses can be misleading when this is the case.
The company will make a presentation today:
Mon, Sep 24, 2007
• Novatel Wireless to Present at Jefferies Technology Conference 2007 (http://biz.yahoo.com/bw/070924/20070924005074.html?.v=1)
Business Wire (Mon, Sep 24)
It will be nice to hear what management has to say about the future.
I'll hold NVTL for the long term.
I've heard the Jefferies Technology conference and enjoyed what NVTL's president had to say. It appears very strong growth continues in all product categories.
Another thing I found interesting was that he stressed that the company has $3.5 a share in net cash.
This is important, not only because the company doesn't need more money from investors, but also because analysts usually take out the cash portion from their earnings multiple calculation.
So, with NVTL closing at $23.41, taking out the $3.5 cash per share, we get $19.91. This divided by the 2008 EPS estimate (which I find very conservative) of $1.20, gives me a forward earnings multiple of 16.6, which is very attractive for a company expected to grow 53% a year, on average, between now and 2012.
I'll keep holding NVTL for the long term.
I got even more confident on NVTL after listening to the Jefferies presentation (http://investor.novatelwireless.com/events.cfm).
I don't know how analysts come up with 12% EPS growth for 2008 when the company's management keeps reaffirming 53% CAGR in demand for its products until 2012. I think analysts will have to revise their 2008 estimates upwards by quite a lot. That should make NVTL move towards $30 and beyond.
David, I have about 17% of my capital in NVTL, since originally I put more money and then the stock moved up 50%... You sold a half of ICOC today, but what would you advise in regards to NVTL? According to the model it has another potential 66% growth... I can't tell I feel uncomfortable holding this much of NVTL, but perhaps I could manage the money better? I have all the other stocks from your portfolio. But no cash left. Should I wait for a new pick and then lighten up on NVTL? What would you suggest?
NVTL showing strength here...up 6.9%+ for the day and has cleared the short term resistance around $25 on good volume. If it closes above 25, it is set up for a run to $29. I hope it runs up some more before the close.
;D
Quote from: berloga on October 03, 2007, 12:14:27 PM
David, I have about 17% of my capital in NVTL, since originally I put more money and then the stock moved up 50%... You sold a half of ICOC today, but what would you advise in regards to NVTL? According to the model it has another potential 66% growth... I can't tell I feel uncomfortable holding this much of NVTL, but perhaps I could manage the money better? I have all the other stocks from your portfolio. But no cash left. Should I wait for a new pick and then lighten up on NVTL? What would you suggest?
I like NVTL more than ICOC, because I understand the business better and I see a lot more potential and safety in NVTL than ICOC. However 17% of capital in one single stock seems too much weight, I would take that size down to 10% and invest the 7% in a new pick that I'm going to buy today.
Quote from: JKN on October 03, 2007, 03:33:51 PM
NVTL showing strength here...up 6.9%+ for the day and has cleared the short term resistance around $25 on good volume. If it closes above 25, it is set up for a run to $29. I hope it runs up some more before the close.
;D
Well, we closed at $24.91, just a touch below $25. Volume was quite strong, at 1.9 million shares. Also, the stock showed relative strength (not that it means something, it was relatively weak before, and that indication was wrong). I think it will make a bullish breakout this time, we'll see over the next few days.
Analysts must take a deeper look at those 2008 estimates, they seem to be way below where they should be. This upward revision that I expect will probably take NVTL beyond $30 by years end.
I'll keep holding NVTL for the long term.
It was just barely, but NVTL closed above $25, which is encouraging. I wonder if management will provide 2008 guidance at the next earnings call. I'll keep holding NVTL for the long term.
Believe it or not, the day before yesterday I had a dream just before waking up that while most stocks declined, NVTL actually shot to $26! I was pleasantly surprised to see the dream come true. :D
I'll keep you apprised of all my future stock- night dreams. :)
Quote from: berloga on October 05, 2007, 10:06:44 AM
Believe it or not, the day before yesterday I had a dream just before waking up that while most stocks declined, NVTL actually shot to $26! I was pleasantly surprised to see the dream come true. :D
I'll keep you apprised of all my future stock- night dreams. :)
hehe, thanks berloga :)
You should try to keep stocks away from your dreams ... actually you shouldn't dream at all, if you're in a peaceful state of mind. At least according to an Indian philosopher named Osho. Read his book "Intuition", if you enjoy the theme.
NVTL had a good day on Friday, rising 3.1%. It appears we've definitely broken out of that trading range between $22.43 and $24.9 and are heading north now.
I expect NVTL to close 2007 around $30, as analysts revise their 2008 estimates upwards. I'll keep holding NVTL for the long term.
Upgrade :
NVTL Novatel Wireless upgraded to Outperform from Sector Perform at CIBC
Quote from: Garoh on October 08, 2007, 08:59:37 AM
Upgrade :
NVTL Novatel Wireless upgraded to Outperform from Sector Perform at CIBC
Thanks for posting this Garoh :)
CIBC upgraded NVTL to sector outperform, I thought NVTL was the sector ;D
NVTL and SWIR basically divide the World between the two, pretty much like Spain and Portugal did in the 15th century. And NVTL is the biggest of the two (just slightly though).
Anyway, it produced another bullish white candle, as NVTL marches towards $30 and beyond. I'll keep holding NVTL.
Quote from: Garoh on October 08, 2007, 08:59:37 AM
Upgrade :
NVTL Novatel Wireless upgraded to Outperform from Sector Perform at CIBC
CIBC analyst George Iwanyc upgraded Novatel to "Sector Outperformer" from "Sector Performer" and set a price target of $33.
Iwanyc said he already expected a solid third quarter from the company, with possible upside coming from strength in North America. But, he added, "our most recent checks give us comfort that the September USB product launches are going better than we first thought, particularly in Europe." The analyst added he also found that the stronger-than-expected demand in Europe has outstripped Novatel's supply for some products, creating some shortages. But he doesn't see this as a problem. "We believe Novatel is already upping production and we look for full-year guidance to increase," Iwanyc wrote."The shares have already seen a nice run after competitive and product transition fears weighed on the stock early in the third quarter, but we believe there is still room for more growth post the recent run," he added.
Thanks for the useful information La-Onda :)
I especially enjoyed the following:
"We believe Novatel is already upping production and we look for full-year guidance to increase"
I see the move from this analyst made 2007 and 2008 EPS estimates rise one cent:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=40882;image)
But we still have just 12% EPS growth expected for 2008. If we believe the company's internal study that says unit shipments will grow at a 53% CAGR (as I do), then 2008 EPS should be more like $1.65, not $1.21.
There's plenty of room for upside surprises on NVTL and its earnings multiple should expand. I'll keep holding NVTL for the long term.
NVTL held better than the Nasdaq Composite yesterday. Nothing new on the fundamental side. I'll continue holding NVTL for the long term.
Nothing new on NVTL, as we wait for the 3rd quarter earnings results. Analysts are expecting $0.23 EPS, which seems easy to beat:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41015;image)
But next year's guidance is what matters the most now. I still believe that 18% revenue growth and 12% EPS growth is too conservative, especially considering the company has internal projections pointing to 53% CAGR between now and 2012.
I'll keep on holding NVTL for the long term.
Because there's no new fundamental information for NVTL, the stock trades more or less in tandem with the general market, as its earnings multiple expands and contracts. Now that the SPY closed its gap, I think it will have another bull leg to new all time highs, adding 3-5% upside between now and the end of the year.
This bullish move, coupled with rising estimates for 2008, will, in my mind, put NVTL above $30 before 2007 closes.
QuoteBecause there's no new fundamental information for NVTL, the stock trades more or less in tandem with the general market, as its earnings multiple expands and contracts. Now that the SPY closed its gap, I think it will have another bull leg to new all time highs, adding 3-5% upside between now and the end of the year.
Still no bullish move from the general market, so NVTL went down (it usually moves more than the market, it has a higher than 1 beta).
Fundamentally, mainly two reasons make me keep holding this stock:
1) I see people migrating from a fixed or wireless internet connection to a mobile internet connection. Mobile communications operators, which are NVTL's costumers (http://www.novatelwireless.com/partners/operators/northamerica.html) will keep promoting their mobile internet connection services.
2) The company itself sees 53% revenue CAGR between now and 2012, therefore, the 2008 estimates, calling for just 12% growth, seem very conservative in my view and should expand.
I'll continue holding NVTL for the long term, this is a multi-billion dollar company, not $832 M as it is now.
It seems there were some buyers in NVTL because there's a rumor that Sprint, which is both a NVTL and SWIR costumer, will start using just NVTL's products. Now there's an analyst saying that might not be truth, or that it isn't all that significant.
So we've had some money moving out of NVTL and into SWIR today.
These are just short term developments. Over the medium term NVTL will go higher because:
Quote1) I see people migrating from a fixed or wireless internet connection to a mobile internet connection. Mobile communications operators, which are NVTL's costumers will keep promoting their mobile internet connection services.
2) The company itself sees 53% revenue CAGR between now and 2012, therefore, the 2008 estimates, calling for just 12% growth, seem very conservative in my view and should expand.
I'll keep holding NVTL for the long term.
NVTL is still asleep. I guess that only when people start seriously thinking about what 2008 will bring, will the stock rise.
I'm sure people will want a mobile internet connection and no other in the not so distant future. To be truly mobile, computers should work on solar energy ... probably something for ASTI to do ;)
I'll continue holding NVTL for the long term.
NVTL has been suffering from an earnings multiple compression, because the general market has been down lately. But I believe in a much higher than $1.2 EPS number for 2008, with or without general economic growth, as people substitute their fixed or wireless internet connection for a mobile one.
I'll continue holding NVTL for the long term, despite the short term weakness.
>:D
Novatel Wireless upgraded to "buy"
Monday, October 22, 2007 8:55:07 AM ET
Morgan Joseph & Co
NEW YORK, October 22 (newratings.com) - Analysts at Morgan Joseph upgrade Novatel Wireless Inc (NVTL.NAS) from "hold" to "buy," while raising their estimates for the company.
The target price is set to $32.
In a research note published this morning, the analysts mention that the company's performance in 2H07 is expected to be robust, which is likely to continue into 2008. Novatel Wireless' sales over the near term are expected to be primarily driven by the new USB727 Ev-Do Rev A modem and the release of MC950D for operators in Europe, the analysts say. The EPS estimate for FY08 has been raised from $1.30 to $1.40.
Thanks for the information La-Onda :)
QuoteIn a research note published this morning, the analysts mention that the company's performance in 2H07 is expected to be robust, which is likely to continue into 2008. Novatel Wireless' sales over the near term are expected to be primarily driven by the new USB727 Ev-Do Rev A modem and the release of MC950D for operators in Europe, the analysts say. The EPS estimate for FY08 has been raised from $1.30 to $1.40.
Yes, $1.40 seems more likely than the $1.21 analysts, on average, are expecting:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41253;image)
I think we'll see several more of these upgrades as the 15 analysts currently covering NVTL start looking into 2008 numbers.
We've had two more press releases:
• Novatel Wireless Wins AeA Award for USB Product Line (http://biz.yahoo.com/bw/071022/20071022005497.html?.v=1)
Business Wire (Mon, Oct 22)
• Novatel Wireless Climbs Deloitte's Wireless Fast 50 Rankings (http://biz.yahoo.com/bw/071023/20071023005523.html?.v=1)
Business Wire (Tue 8:00am)
The "juice" I get from all this is the following:
«The
company continues to see increasing demand across all major product lines including its Ovation USB devices, Merlin PC and Express cards and Expedite embedded modems
as enterprises and consumers turn to 3G wireless broadband access solutions in place of legacy DSL and landline connections.»
These comments are in tandem with my expectations.
I'll keep holding NVTL for the long term.
main reason for drop is documented on SWIR board!
NVTL: Short Interest DN 5.1% to 7.9M in Mid Oct 2007
Wednesday, October 24, 2007 16:24ET
According to new short interest data from NASDAQ, short interest for Novatel Wireless Inc (NasdaqNM: NVTL) DECREASED 5.1% to 7,895,944 shares as reported in mid-October, 2007.
SYMBOL END SEPTEMBER MID OCTOBER CHANGE %CHANGE DAYS/COVER
-------- ------------- ------------- ------------- ------------ ----------
NVTL 8,316,721 7,895,944 -420,777 -5.06% 7
Based on NVTL's 20-day average daily share volume of 1,133,820, it would require approximately 7 day(s) of buying to cover this short interest.
NVTL went down 8.6% yesterday because of the following news:
• Qualcomm Introduces Gobi Global Mobile Internet & GPS Solution for Notebook Computers (http://biz.yahoo.com/prnews/071024/law085.html?.v=101)
PR Newswire (Wed 12:43am)
From reading this press release, it seems like QCOM, a $69 B mammoth, is working directly with HP (SWIR's costumer) and Vodafone (NVTL's costumer). It is easy to conclude that QCOM is walking around NVTL and SWIR, making a substitute and better product, and then selling it directly to notebook manufacturers.
If we read the Gobi's product website (http://www.cdmatech.com/products/gobi.jsp) we get the same general idea.
However, we have SWIR's CEO words and a few informative posts by la-onda in SWIR's thread which point in another direction:
«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.»
«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.»
Which way to go? As I read the available information on Gobi, I'm not sure if it needs SWIR and NVTL's products anymore. I see that the prior technologies needed a wireless device manufacturer to build the modems, but I'm not sure if Gobi isn't a chip put directly into the computer to allow for mobile connectivity to any mobile carrier.
It is very different to have QCOM as a direct competitor than to have the barrier lowered for the entrance of new small competitors. In the first case NVTL's business is basically destroyed. In the 2nd case it can only be damaged.
Anyway, I need to take care of my business, which is managing the Main Portfolio and explaining why I take the decisions I take with the limited information and knowledge I have.
As I look into my valuation model for NVTL, I have the 4 working variables of the model:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41302;image)
1) Dilution Factor
I have 8%. The share count grew 8.83% over the past 12 months, so I have a little correction to make here.
2) Revenue CAGR
I have 68% (http://www.3stocksonfire.org/fundamental.model.php?ticker=NVTL&portfolio=main). Analysts are forecasting just 18.9% growth for 2008 (http://finance.yahoo.com/q/ae?s=NVTL). However, NVTL's internal studies say the market for units shipped is expected to grow 53% a year, on average, between now and 2012.
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=39817;image)
Now I begin to worry that unit modem shipments growth won't be the same as revenue CAGR because average selling prices may come down. It looks like Gobi's attempt is to lower the price for notebook manufacturers and mobile carriers to put mobile internet in consumers hands at the lowest possible price. I don't know about you guys in the US, but here in Europe one needs to pay 100 € to get the modem, and then about 30 euros monthly for the connectivity. I guess they're trying to eliminate the initial 100 euros, or pushing it down so it can be diluted in monthly payments.
Anyway, since analysts are calling for just about 19% growth, maybe/probably I'm being too optimistic in expecting 68% revenue growth. Let's bring this estimate down to 40%.
3) Final Net Profit Margin Estimate
I have 8%. That's what analysts are expecting for 2008 too. But now I wonder if it will remain this high for long, since I perceive there's a common interest, from Qualcomm, notebook OEM's and mobile carriers to squeeze the wireless device manufacturers or even bypassing them.
Well, I'm going to bring this down just a bit, to 6%.
4) EPS multiple estimate
I have 29.14, but that seems too rich now, since NVTL has several long term competitive threats. Due to what happened yesterday, I believe investors will always be afraid of a new product or technology showing up in the market and killing NVTL's products (even if that isn't the case with Gobi, which I'm not sure yet).
I say NVTL's earnings multiple will probably stand at around 18 for the long term, balancing the probable strong growth with the risk of its technology becoming obsolete.
I also need to make changes to the Initial Revenue (I had the 2006 number - I'll put the 2007 estimate instead) and the Initial Share Count (I had the Q1 2007 number - I'll change it to the Q2 share count).
The final results are the following:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41306;image)
The share price CAGR declined to 10.65%, from about 40%. As you're probably aware, I only consider investments attractive when I expect t least 16% share price CAGR over the long term. 10.6%, even though it is acceptable, isn't attractive enough to achieve my long term goal of an average annual return of at least 30% for my investments, so unfortunately NVTL must leave the Main Portfolio.
I'm a bit sad to sell NVTL with just a 54% or so profit, because I expected more, and at one point I had a 100% profit, I believe. On the other hand, I must take advantage of owning shares, and not the businesses themselves, because this way I can exit if I see trouble ahead with ease. The business owners are left with the pain and work to reinvent themselves, they're not as flexible.
I believe investing from a business perspective also means selling your investment if the business conditions turn sour and look for other, more promising investments.
The Trading Plan for NVTL is:
SELL.
fiy:
NVTL: To Release Q3 Results Nov 05 [AMC]
Saturday , November 03, 2007 08:30ET
Novatel Wireless Inc (Nasdaq NM: NVTL) is scheduled to release its Q3 financial results on November 05, 2007, after the close of the market (AMC).
CONSENSUS ESTIMATES:
Q3 Revenue: $101.53 million
Q3 EPS: $0.28 per share
PREVIOUS PERIOD:
Prev Q3 Revenue: $55.55 million
Prev Q3 EPS: $0.04 per share
could be a nice Earnings play imho
Q3 transcript:
http://seekingalpha.com/article/52913-novatel-wireless-q3-2007-earnings-call-transcript?source=yahoo
chart:
Seeking Alpha update:
Looking For a Short Scalp on Novatel After Piper Note
posted on: November 15, 2007 | about stocks: NVTL
Piper Jaffray is out with a cautious call on Novatel Wireless (NASDAQ:NVTL), saying that based on comments at QUALCOMM Analyst Day and discussions with QUALCOMM management, they believe new Gobi embedded solution is gaining more traction than previously anticipated. As a result, they are lowering their PC-related embedded module estimates for 2H08 and 2009, resulting in reducing estimates and price target on NVTL.
Notebooks featuring the multi-mode Gobi solution will have access to the high-speed mobile Internet services offered by network operators in virtually all parts of the world as the solution supports both CDMA2000 EV-DO and HSPA networks worldwide.
Based on comments at QUALCOMM Analyst Day indicating Gobi should ship in volume at a very competitive price by mid-2008, PJ believes this solution will facilitate increased competition for Novatel's embedded module segment. In fact, they believe the common software API and reference design for a software-defined configurable data module supporting both EV-DO Rev. A and HSPA with full backward compatibility, will enable price leaders to enter the market and lead to intense price competition.
Further, discussions with QUALCOMM management indicated strong early momentum for Gobi, with a design win at HP in-hand and strong interest from numerous other tier 1 notebook OEMs.
PJ is lowering their 2008 proforma EPS estimate from $1.45 to $1.38 and 2009 proforma EPS estimate from $1.55 to $1.29. Price target is cut to $19 from $26.
Notablecalls: Gobi was introduced on Oct 23, causing a sharp sell-off both in NVTL and SWIR. So, in that sense PJ's call does not highlight any new negatives. But it does bring the competitive problems to the forefront. PJ's not the only one out with cautious comments this AM. Deutsche Bank notes that revisiting last month's announcement on their Gobi platform the company expects to ramp up shipments of its embedded laptop module.
They see this as a drive to bring down the cost of embedding data connectivity and as a competitive to step to fend off WiMAX. This is a smart move, but one that is likely going to make things difficult for Novatel and Sierra Wireless, in DB's view.
All in all, I think there may be some more downside in NVTL following PJ's call. Just a short scalp, though.
Novatel Wireless Collaborates with Qualcomm to Provide Gobi Global Mobile Internet Embedded Solutions
Tuesday November 27, 8:00 am ET
Notebook Manufacturers Benefit from Novatel Wireless' Complete Product Portfolio with Full Integration, Certification and Support
SAN DIEGO--(BUSINESS WIRE)--Novatel Wireless, Inc. (Nasdaq:NVTL - News), a leading provider of wireless broadband solutions, today announced that it is working with Qualcomm to add the Gobi (Global Mobile Internet) platform to the Company's broad portfolio of embedded mobile broadband access solutions.
"We believe our continued collaboration with Qualcomm benefits our OEM customers and further strengthens our value proposition. The combination of Gobi-enabled notebook computers, along with the unparalleled integration, certification and support that Novatel Wireless provides, is the ideal solution for notebook manufacturers interested in delivering high-quality mobile broadband data connectivity to its customers worldwide," said Rob Hadley, senior vice president of worldwide sales and marketing for Novatel Wireless. "We look forward to expanding our support of more than 60 current embedded OEM platforms by providing Gobi-enabled products in the second half of 2008 as part of our overall embedded product portfolio."
"Qualcomm's relationship with Novatel Wireless is important to our efforts to drive the widespread adoption of embedded cellular connectivity for notebook computers," said Mike Concannon, vice president of product management, Qualcomm CDMA Technologies. "We look forward to collaborating closely with a variety of industry partners to accelerate the worldwide availability of notebooks with multi-mode Gobi global mobile Internet, ensuring that the benefits of the technology are available to consumers worldwide."
The embedded Gobi solution for notebook OEMs from Novatel Wireless 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 and GPS functionality. By supporting worldwide standards, notebook manufacturers can deliver products with global connectivity capabilities while benefiting from greater efficiencies and a simplified user experience.
Modules from Novatel Wireless based on Qualcomm's Gobi solution will join Novatel's Expedite family of modules (E860D, E870D and E725), which deliver a rich user experience for integrated wireless capabilities and services ranging from e-mail active notification, multimedia streaming, video telephony, mobile gaming, corporate network access and web browsing.
seeking alpha update:
Novatel (NVTL) and Sierra Wireless (SWIR) produce wireless datacards, usb modems, and embedded wireless modules in PCs to connect to carrier networks. They have enjoyed favorable pricing and strong margins as their stocks have run up over the last year. The bear case had always been that larger competitors would enter the market and price them out.
Well, it seems that the bear case is playing out now as Qualcomm (QCOM) has introduced their Gobi wireless solution and sources indicate that FoxConn will be producing an embedded module which should help to crush Novatel and Sierra Wireless' margins. The price point is rumored to be around $80 compared to the current $120 - $150 that NVTL/SWIR charge. Simple math tells you that two things will happen: 1) these two will face severe pricing pressure and, 2) they will lose business to the larger competitors (Huawei, etc). Compound this further with the fact that these companies are one trick ponies for the most part and you could find them trading in the single digits very soon.
UPDATE: Deutsche Bank recently published a report stating that Ericcson (ERIC) Mobile Platforms is offering an embedded module in the $40 range for 2008. This is a significantly worse (better) pricing situation for NVTL and SWIR. Consider this - currently, their bill of materials is around $80-100 to produce these modules.
I continue to be short these names.
David:
Great call on selling NVTL. Today it closed down 23% to close at 10.69. At todays price taking that 50% profit looks pretty good now. After 30 years of investing I feel its good lessons to review prior trades occasionally with preset company fundamentals to learn from mistakes and success's. Thanks for all your hard work and all the other members who share there wealth of information here. I have been here for some time but seldom post. Each day I try to read posts in all the message boards to gain what ever knowledge I can. Thanks again. To all, good health and trading.
Poli
Quote from: poli on February 21, 2008, 10:34:00 PM
David:
Great call on selling NVTL. Today it closed down 23% to close at 10.69. At todays price taking that 50% profit looks pretty good now. After 30 years of investing I feel its good lessons to review prior trades occasionally with preset company fundamentals to learn from mistakes and success's. Thanks for all your hard work and all the other members who share there wealth of information here. I have been here for some time but seldom post. Each day I try to read posts in all the message boards to gain what ever knowledge I can. Thanks again. To all, good health and trading.
Poli
I just read this post, thanks Poli :)
Indeed, it was a good call to sell NVTL at $22.55, since the stock closed at $10.39 yesterday.
The earnings multiple on estimated 2008 EPS (http://finance.yahoo.com/q/ae?s=nvtl) has been compressed to 8.3. I remember when NVTL traded as high as $30 and people didn't mind paying 30 times EPS for this stock. So, things change a lot and it doesn't necessary have to do with changes in fundamentals in terms of revenues and profits, the multiple expansions and compressions do the trick.
I've sold NVTL (and SWIR) mostly due to competition coming from Qualcomm (Gobi product). Some people have also expressed competition concerns on this thread. But SWIR has been holding up reasonably well:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=44438;image)
Investors keep switching from preferring SWIR over NVTL and the opposite. Six months ago NVTL was more highly valued, now it's SWIR. In this case I prefer to go with NVTL, here's why:
- SWIR trades at 11.3 times 2008 estimated EPS, while it grows it by 8.8%;
- NVTL trades at 8.3 times 2008 estimated EPS, while it grows it by 12.6%.
I think NVTL has the potential to rebound to have an earnings multiple equal to the growth rate of 12.6, and that would mean 12.6*$1.25 = $15.75 per share.
But since we're talking "technimental" and more short term, I won't be this ambitious. Looking at the chart below I think NVTL will at least rebound to close the gap at $13.6, a 30.9% return from yesterday's close:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=44439;image)
This looks like a potential inverted head & shoulders pattern to me. The right shoulder "theory" would be compromised if the stock were to close below $9.60, so I feel this is a good level for a bail out and cutting losses short.
The Trading Plan is:1. Buy NVTL for the TM Portfolio at today's open.
2. Take profits at $13.6.
3. Exit with a small loss if the stock is set to close below $9.6.
The Trading Plan is:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
The Trading Plan is:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
Good choice david :)
Very soon we'll be at the target ...
Please take a look at this good stock (CALM)
I bought it wednesday , It's a very good long term investment
QuoteGood choice david :)
Thanks Garoh, but we need to let the market judge this :)
QuoteVery soon we'll be at the target ...
We'll see. First, NVTL has to enter the "gap zone" at $11.83 and move above the 50 days SMA currently at $12.01.
QuotePlease take a look at this good stock (CALM)
I bought it wednesday , It's a very good long term investment
I see it in the Watch List, posted by BigSully1, so I'll get there ;)
The Trading Plan is:1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
The Trading Plan is:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
The Trading Plan is:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
Yesterday's action on NVTL was disgusting and I don't like seeing not even a bit of red in the TM portfolio page.
But as I review the fundamental case I feel the stock is just making something like an inverted head & shoulders pattern and should enter the "gap zone" soon.
I'm going to leave the trading plan intact.
Trading Plan:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
Volume was quite strong on NVTL yesterday ... without analysts recommendations. It looks like the 2nd shoulder of the inverted H&S was made. Now we need a bullish breakout of the neckline, which currently stands around $11.
Trading Plan:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
Trading Plan:
1. Take profits at $13.6.
2. Exit with a small loss if the stock is set to close below $9.6.
Oh man, NVTL issued a profit warning:
• UPDATE - Novatel cuts Q1 view, shares fall (http://us.rd.yahoo.com/finance/external/reuters/SIG=1165jh9eu/*http://www.reuters.com/legacyArticle?duid=mtfh87021_2008-04-14_21-45-20_bng144152_newsml&rpc=44&type=marketsNews)
at Reuters (Mon 5:45pm)
This loss will be larger than initially planned due to a gap down at the open. In a situation like this there's nothing to weigh or consider, the stop loss is triggered at the open.
The Trading Plan is: SELL.
However, I want to note that this was a "trading at a discount vs its peers" play, which often doesn't work, because the discount is there for a reason.
In the future I will shy away from this kind of plays.