3SOF

The technical players saw the all important technical breakout on Wednesday and rushed to buy ARRS at yesterday's open, hence the gap up. Then the stock came down to fill the gap. This is normal market activity.

On Monday ARRS will present at the Thomas Weisel Partners Technology Conference and I'll be listening. The company also said yesterday it will release results on February 15th:

• ARRIS Group, Inc. Earnings Call scheduled for Thu, Feb 15
CCBN (Thu 1:10pm)

I'll continue holding ARRS, attractive both from a technical and fundamental perspective.

ARRS now spent two days above the all important $14.3 resistance level, so the resistance is definitely broken on the upside. Probably bulls will push the stock higher across this week.

Results will be out on February the 15th, and I expect to hear more details about the Tandberg acquisition over the conference call that will follow. I don't have any doubts that the right thing to do is to continue holding ARRS, as the stock is attractive both from a fundamental (14.5 trailing earnings multiple) and technically (closed at a five year high on Friday).

ARRS was able to close exactly at the $14.3 support, after a dip in the morning trading on low volume. I see the stock as cheap, as you can read on the rest of this thread, and the right place to benefit from the current trends toward IP TV, video on demand technologies, video on the web and all that exciting stuff.

Cheap, but in an attractive and growing sector.

I've heard the Thomas Weisel Partners Technology Conference, with ARRS CEO presenting, which you can listen here:

http://www.veracast.com/webcasts/twp/tech07/97101197.cfm

After this, and re-reading this thread, I have no doubts that ARRS is a sound long term investment, on the right place at the right time.

Technically the stock yesterday closed at the highest close in 5 and a half years. I'll keep holding ARRS.

ARRS closed at a new high yesterday, the trend is your friend, hold on to those shares.

Today's update is exactly the same as yesterday's:

QuoteARRS closed at a new high yesterday, the trend is your friend, hold on to those shares.

ARRS had a small pullback in sympathy with the general market. I'll continue holding ARRS.

ARRS is pulling back to touch support, prior resistance, at $14.3.

Earnings will be out on Thursday:

«Networking solutions provider ARRIS Group (Nasdaq: ARRS) made headlines last month for its proposed acquisition of digital video and IPTV hardware provider TANDBERG Television. A couple of brokerage analysts also believe ARRS' fourth-quarter earnings could also make headlines. Two analysts have raised their forecasts over the past 30 days, causing the consensus estimate to rise by a penny to 26 cents per share. The Most Recent Consensus is more bullish at 27 cents per share. ARRS has topped expectations for two consecutive quarters, though the company's first-quarter results were below analysts' projections. ARRIS Group is scheduled to report on Thursday, Feb 15, after the close of trading.»

I'll keep holding ARRS.

I guess ARRS has been down over the last 3 trading days because 4Q results from Tandberg TV were disappointing:

• UPDATE - Tandberg TV profits down, says had several suitors
at Reuters (Thu, Feb

Anyway, I still see ARRS as cheap. Its own results will be released tomorrow after the market closes. I'll make a more detailed analysis of ARRS on tomorrow's update.

I'll continue holding the stock.

The main reason that led me to switch from HLIT to ARRS was that ARRS is stronger and cheaper, so it wouldn't make any sense for me to let go of the stock now that it is about to report 4th quarter earnings.

ARRS earnings were out and better than expected:

«NEW YORK (MarketWatch) -- Arris Group Inc. said late Thursday fourth-quarter earnings rose to $70.3 million, or 64 cents a share, from $22 million, or 20 cents a share, a year earlier on demand for VoIP and high-speed data products. Excluding amortization, equity compensation expense, restructuring accrual adjustments and tax benefits, non-GAAP earnings in the most recent quarter were 32 cents a share.
Analysts polled by Thomson Financial expected, on average, fourth-quarter earnings of 28 cents a share, before items. The Suwanee, Ga., telecommunications company's revenue for the fourth quarter increased 29.4% to $234.6 million from $181.3 million a year ago. Wall Street was looking for revenue of $230 million.»

For the full year of 2006, ARRS EPS was $1.30. Excluding special items 2006 EPS was $1.04. This puts ARRS's trailing earnings multiple at $14.73/$1.04 = 14.

This looks too cheap to me, considering the growth the company has been experiencing lately. Here's the complete press release:

• ARRIS Announces Preliminary and Unaudited Fourth Quarter and Full Year 2006 Results

There were also reports out with some more information about the Tandberg acquisition. Here's a summary of what the new combined company will be:

«Combining the resources and experience of ARRIS and TANDBERG Television will produce a new company, unique in its ability to enable voice, video and data over any network and to any consumer device. ARRIS is a leading global provider of VoIP, data broadband network equipment and consumer premises devices; TANDBERG Television is a market leader in both the digital video sector and the global video processing market with award-winning solutions for advanced compression, on-demand and interactive television.

ARRIS and TANDBERG Television have a strong shared philosophy of innovation and track-records of profitable growth. The merged company will have a significant global presence with over 1600 employees and more than 2000 customers in more than 100 countries. ARRIS' strong North American cable business and strategic customers in key international markets will be significantly expanded through TANDBERG Television's international market leadership position in IPTV, HDTV and on-demand television.»
PR Newswire (Thu, Feb 15)

I want to participate in these industries and ARRS looks to have the best reward/risk ratio in the space, because it has strong growth capability and valuation is cheap when compared to its industry's peers.

I'll continue holding ARRS.

Question for tomorrow:

"What is the combined calendar 2006 revenue and net income for ARRS and Tandberg TV?"

Technically nothing changed on ARRS, the stock remains bullish, I'll remain long.

Nice day for ARSS up over 4% right now

Quote from: nullzero on February 21, 2007, 01:40:07 PM
Nice day for ARSS up over 4% right now

Yep, nice move on strong volume

QuoteWhat is the combined calendar 2006 revenue and net income for ARRS and Tandberg TV?

Well, ARRS had revenues of $891.6 M and net income of $142.3 M.

Tandberg TV had revenues of $350.3 M and net income of $55.6 M (as you can check here: http://www.tandbergtv.com/NewsView.ink?Newsid=1138)

So, the combined company had 2006 revenues of $1.242 B and net income of $197.9 M.

The current market cap, including 14.5 million newly issued shares to buy Tandberg TV, is 122.32 million*$15.26 = $1.867 B. So, the trailing earnings multiple of the combined company is $1.867 B/$197.9 M = 9.43.

Cheap my all means. ARRS should at least double from current levels.

I became more confident about ARRS and its prospects after yesterday's update. The stock gave back about half of Wednesday's gain. I say this is normal market behavior and the trend, the thing that gives a man money over the long term, is bullish, so I'll continue holding ARRS.