WSTL

[Michael]

Who supply's the equipment when the Telcom carriers roll-out their Broadband infrastructure?

Yeah I know Motorola, Ericsson, Qualcomm and Westell.

You probably know the first 3 but Westell!

Well compared to the big players Westell is focused on Broadband, Media Integration, VoIP and IPTV all services that are experiencing explosive growth:



Westell provides equipment to SBC, Verizon, British Telecom, Belll South, Qwest, Sprint, MCI to mention a few. A solid customer database and the boxes they deliver are pretty sexy.

They obviously have the usual stuff like DSL (they have delivered 10 million of DSL devices to their customers), WiFi hotspots, routers etc. but try to have a look at their Media Gateway



Ever wondered what the future of Telephony would look like? You are looking at it!

This beauty provides you with:

Digital Cordless speakerphone
Choice between using conventional POTS and VoIP
Wireless and wired network
Video Telephony
Video Conferencing
Standard Windows interface
Full Internet Access
The list goes on......

The gateway is developed together with carriers and is about to be introduced by Verizon as Verizon One.

All Telco operators are looking for ways to differentiate their broadband service and at the same time create loyalty. I hope we will see some aggressive pricing on DSL packages combined with the media gateway. If marketed correct the gateway would lock the customer into not only the operators DSL service but also their least cost routing options including VoIP, and IPTV and Video conferencing.

The media gateway is however not the reason for buying WSTL but rather icing on the cake. Their solid broadband business is the core of the business.

The company is traded at a forward PE 9.9, which is significant lower than their peers. The stock dropped 33% last week after Q1 earnings and outlook for 2005 disappointed the market. The Q1 showed a 24% increase in EPS per share to 10 cents compared to the analyst's expectation of 11 cents. The revenue increased with 35% compared to the same quarter last year.



The main reason for the drop in share price was the outlook for next quarter when the company expect earnings of 3 to 4 cents. They cite seasonal weakness and pricing competition.

I think that the correction is overdone. The company is profitable, has essentially no debt, a solid customer base and is operating in spectacular growth markets.

I have therefore bought WSTL today at 4.15 I would expect a reversal in the days to come.

[Michael]

WSTL is mentioned in today's bulletin from greenbackers com:

July 25, 2005 9::09am est

attracted to:

WSTL rebounding pattern taking shape....double two day bounce off of 4.10 worth noting......upping 4.35 initial target to 4.45.....entry immediate / 4.27)

Not the most prestigious newsletter around but with a good track record.

There is also a message on Yahoo that Fio, Burzovni Spolecnost, AS has a speculative buy on WSTL:

London, July 25 (Bloomberg Data) -- Westell Technologies Inc. (WSTL US)
was rated ``speculative buy'' in new coverage by analyst Radek Neumann at
Fio, Burzovni Spolecnost, AS. The 6-month price target is $5.40 per share.

I have not been able to confirm this (Anybody know Czech  )

We ended the day up (4.24) and a new bottom at 4.19 has hopefully been confirmed. There is no resistance until 4.94. Will be exciting to see the trading tomorrow. I would like to see higher volume.

[Michael]

Verizon has updated their web site with Westell's gateway. Sure looks nice: https://www22.verizon.com/verizon-one/

[nikao]

hmm.. sure looks interesting!.. this one is heavily oversold and outside the lower boilingerband.. think it will rebound soon

[nikao]

im in at 4,30.. let's see if this baby can bounce

[nikao]

the bottom of 4.19 isnt holding at the moment

[Michael]

Hi Nikao,

Well today is not the day for the rebounce. I am actually a bit surprised. We had some good news from Verizon and Microsoft.

One of the things that attracted me is the limited risk. I still hope that 4.19 will hold. The analyst target after the disappointing Q1 is 5.00 so there should still be room for a nice increase.

I will sell if it goes through 4.10.

[nikao]

so it recovered a little in the last 5 minutes from 4.09 to 4.14.. guess I will hold this, can't imagine this one going further down without bouncing up..  (it's not forming a bearish flag .. so thats good isnt it?)

[Michael]

Hi Nikao

I decided to stay in as well.

I sometimes use Stockconsult as a guide when I am in doubt (as I do not have a direct line to David and eliteG )

Here is what they write about Westell:

BULLISH 

• Probability - Intermediate trend possibly bullish, Sideways trend near lower support.
• Probability - Extreme Oversold, odds definitely favor long trades.
• Probability - Short term extreme pullback, expect pullback to pause/stop.
• Confirmation - Extreme 3 day distribution, but when the stock is oversold this is considered bullish.
• Confirmation - Extreme bearish 1 day moneyflow, on an strong-extreme pullback is considered bullish.
• Probability - Strong Down trend (1 month), may start to turn sideways.
• Confirmation - at support

 

BEARISH 

• Probability - Mild bearish 3 day chart pattern.

   
Have a look at the full report: http://www.stockconsultant.com/consultnow/basicplus.cgi?ID=sample&symbol=WSTL&12063#ttop

[nikao]

And another day of slightly going down... im still in here cause every time I look at the chart and I see this HUGE gap down, I can't believe it will go down further without pulling back a little

[stocky]

Yes its resting at the support but after a tremendous gap, I think there may be more down side to come. However, for WSTL to be 'BUY' it need to close above 4.3 with atleast avg. volume. I will watch this one.

mike, need your input on AMPX.

[nikao]

WSTL printed a nice little tiny hammer

Hope it will hammer out 4,19 again to make that support again. After that we're good to go (up that is! )

[nikao]

hmm quite some after hours buying (this is only for INET!)

17:30:07.559     S     28,000      4.1400
17:29:31.815    B    28,000     4.1400
16:16:44.238    S    3,500     4.1300
16:02:04.637    B    1,000     4.1800
16:00:42.951    B    3,500     4.1800

what to think of this? 

[nikao]

and another (failed) attemp to break the resistance at 4,19

we're closed in a tight range, time to break out! (up of course )

[nikao]

WSTL is moving in a very tight ranged price channel currently..

If it can test resistance around 4,14 again it would be showing the same pattern I mis-traded in GTCB (a mirrored ascending triangle)

Since I think it can go and test that resistance I'll patiently wait so I don't miss a big white candle as i did in GTCB