3SOF

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
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.

I'll keep holding NVTL as I wait for the 2007 full year guidance.

NVTL has made a small jump after hours. 

Someone bought 1000 @ 17.65 

Quote from: Houlahan on April 26, 2007, 06:02:21 PM
NVTL has made a small jump after hours. 

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:





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:



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
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.