MRVC

[David Randolph]

First let's take a look at MRVC's profile:

«MRV Communications, Inc. ("MRV") is a leading provider of network equipment and services, and optical components. MRV's networking business provides equipment used by commercial customers, governments and telecommunications service providers, and includes switches, routers, physical layer products and out-of-band management products as well as specialized networking products for aerospace, defense and other applications including voice and cellular communication. MRV's optical components business provides optical communications components for metropolitan, access and Fiber-to-the-Premises applications, through its wholly owned subsidiary LuminentOIC, Inc. MRV markets and sells its products worldwide through a variety of channels, including a dedicated direct sales force, manufacturers' representatives, value-added-resellers, distributors and systems integrators. MRV also has operations in Europe that provide network system design, integration and distribution services that include products manufactured by third-party vendors, as well as internally developed and manufactured products. Publicly traded since 1992, MRV is listed on the NASDAQ National Market under the symbol MRVC. For more information about MRV and its products, please call (818) 773-0900 or visit our websites at www.mrv.com and www.luminentoic.com.»

This company sells a lot, but it's still losing money, as most of its competitors. The sector has been rising as a whole, although it is hard to explain why, since most companies (perhaps except CSCO, which is also rising) lose money.

MRVC seems to be undervalued against its peers, since it has a market cap of just $341M, and others are already in the billions (without profits).

Talking about profits, the CFO said some interesting things on the latest results presentation:

«"The Company made significant strides in its goal of reaching sustainable profitability in the second half of 2006," added Kevin Rubin, Chief Financial Officer of MRV. "During the quarter, we increased gross profit by $6.9 million year-over-year, reduced our net loss sequentially and decreased inventories. Importantly, gross margins in our optical component business improved, highlighting the operating leverage in that business."»

Price to sales ratio of MRVC is 1.20, and for its industry it is 2.92. For example, for CIEN it is 5.91 and for CSCO it is 5.

Fundamentals seem to be improving:

«"Our strong fourth quarter results were led by an exceptional performance from our optical component group with the prospects for accelerating growth for this business in the near future," commented Noam Lotan, President & CEO of MRV. "FTTP deployment has exceeded expectations and increasing demand from end customers like Verizon and others is driving scale into our optical business, increasing gross margins and moving solidly toward profitability. Our networking business also made significant progress, as core product revenues experienced double digit growth and we added to our experienced sales team to capitalize on the opportunities in out-of-band networking and metro Ethernet. As expected, our top line also benefited from the seasonal sales of lower margin third party products from our system integration in Europe."»

Technically the stock is a beauty as you can see on the charts below.

I'll buy MRVC for the Stocks on Fire Portfolio around today's open, 6.66% of capital as usual.

[la-onda]

additional info:

MRVC: Short Interest UP 1.0% to 3.8M in Feb 2006
Monday , February 27, 2006 16:25 ET
According to new short interest data from NASDAQ, short interest for MRV Communications Inc (NasdaqNM: MRVC) INCREASED 1.0% to 3,815,079 shares for the month ended mid-February, 2006.

SYMBOL       JANUARY        FEBRUARY          CHANGE       %CHANGE     DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
MRVC           3,776,487       3,815,079         +38,592        +1.02%           5
Based on MRVC's 20-day average daily share volume of 773,990, it would require approximately 5 day(s) of buying to cover this short interest.

&

LuminentOIC Introduces 200-km Reach DWDM SFP Transceiver

Wednesday, March 01, 2006 17:01 ET

HSIN-CHU, Taiwan and CHATSWORTH, Calif., March 1, 2006 /PRNewswire-FirstCall via COMTEX/ -- LuminentOIC, a leading supplier of metro & access transceivers and Fiber-to-the-Premise solutions, today announced the availability of the industry's first 200-km reach DWDM SFP transceivers.

LuminentOIC has been shipping 80-km and 120-km DWDM SFP products in volume since mid-2005, and now introduces an extended-reach 200-km product. In addition to achieving a longer fiber span, all DWDM SFP products are now available in both a standard and a high output power version, enabling a larger optical budget of 31dB. LuminentOIC's 200-km reach DWDM SFP product will be on display at Optical Fiber Communication Conference and Exposition (OFC) in Anaheim, CA from March 7-9, booth #1601.

The pluggable form-factor translates to significant advantages for system manufacturers in terms of time-to-market, configuration flexibility, and inventory management. While initial applications have primarily been in metro access systems, DWDM SFPs are now starting to find opportunities as replacement for fixed discrete optics in longer-reach systems.

"We have experienced great customer interest in our DWDM SFP, benefiting from being first to market. Demand has consistently beat expectations, and we have been shipping in production volumes since last year. The longer-reach product is a natural progression in response to emerging customer demand, and builds on the established design and manufacturing infrastructure," said Thomas Liljeberg, Director of PLM, Transceivers.

LuminentOIC's 200-km reach DWDM SFP product is available for sampling now with volume production starting in the second quarter 2006.

For more information on LuminentOIC's WDM SFP product portfolio, please visit booth #1601 at the Optical Fiber Communication Conference and Exposition (OFC) in Anaheim, CA from March 7-9, 2006, or please visit the website at http://www.luminentoic.com. For more information on OFC, visit http://www.ofcconference.org/ .

LuminentOIC is a wholly owned subsidiary of MRV Communications (Nasdaq: MRVC) and a world-class, leading edge manufacturer of optical components since 1988. LuminentOIC provides complete solutions for Metro Transceivers, FTTP applications, and CWDM/DWDM solutions. The Company's US and Taiwan based facilities leverage off internal vertical integration to offer the lowest cost, high volume component solutions. With a Research and Design center and an ISO9001 and TL9000 certified pilot production line in California, LuminentOIC is well positioned to respond quickly and with great flexibility to customer requirements and design cycles. LuminentOIC's Taiwan facility is an TL9000, ISO9001 and ISO14001 certified high volume manufacturing facility fully staffed to address continual cost reduction via production and automation engineering teams. With a state-of-the-art, mass manufacturing facility utilizing metal organic chemical vapor deposition (MOCVD) and fully automatic packaging and testing processes, LuminentOIC is positioned to deliver state of the art solutions at compelling price points. For more information, call LuminentOIC at 818/773-9044 or visit http://www.luminentoic.com/ .

[fous]

I saw this on the famous filter tonight as well. I think i'll join you in the winners circle at the open

Technically the stock failed a few weeks ago to fill the gap at 3.03 and prevailed today with a long white marubozu to fill the gap with strength as well as breakout of the wedge as dave pointed out.

-fous

[Terliso]

Good Job David, you made over 13% in 1 session on MRVC

By the way, what do you think of CRAY? looks like a good entry point... thanks!!

[la-onda]

Cramer quotation:
Cramer said he wanted to add MRV Communications (MRVC:Nasdaq - commentary - research - Cramer's Take) to the list, despite the fact that the stock plummeted from $91 to $3 after the tech bubble burst.

Over 70% of MRV's sales come from Europe, he said. But the real reason he likes the company is because of the numbers.

He said that estimates for the stock are way too low. Gross margins were at 0% in the third quarter, but jumped to 20% in the fourth.

MRV Communications said it could see 30% sequential sales growth in its optical business in the first quarter of this year, Cramer added.

FTTP sales, meaning the fiber optic network used in homes in business, have been strong, he said, and he believes they will be stronger going forward.

And finally, Cramer said that MRV Communications is a momentum play. It started the year at $2 and is up 60%. "If you get momentum sickness, I think you should avoid this one," he said.

http://www.thestreet.com/_yahoo/funds/madmoneywrap/10271769_3.html

[David Randolph]

Good Job David, you made over 13% in 1 session on MRVC

By the way, what do you think of CRAY? looks like a good entry point... thanks!!

Thanks Terlisa 

CRAY? Let me see, I already made an analysis on it and it wasn't positive. Let me read that again:

CRAY analysis

I read some more, I'm somewhat neutral on CRAY. I have a natural tendency to enjoy more of businesses which are consumer oriented. CRAY sells just a few supercomputers a year, but they are very costly. Revenues will probably be very unstable going forward.

But good luck on your judgement Terlisa 

Where was I? MRVC, ok.

What a shot to moon, wasn't it? As I read this entire thread again I see there's no reason to sell here. Expecting MRVC to go beyond $5 in the not so distant future.

[fous]

Lockin in the profits. Just sold, thanks for the pick Dave that was a nice quick 25%! Strange day for NTO on the release of solid earnings. I may buy that in a little bit, looks like an ascending triangle forming.

-fous

[shawFund]

Cramer pumpped this stock yesterday.

His other buys are IFLO, JDSU, CIEN, BKHM.
..

[David Randolph]

Cramer pumpped this stock yesterday.

His other buys are IFLO, JDSU, CIEN, BKHM.
..

It's interesting to note MRVC is the only one where he's making money. The stock is very, very strong, as bulls didn't let it close the gap. I'm ahead 33% on this one, so I should sell right?

Well, perhaps ... but there's no technical or fundamental reason (that I know of) that tells me to do so. Given this, why should I bother making technical or fundamental analysis if then I would not follow its indications?

I said on a previous update I expected MRVC to cross $5 in the not so distant future. I stand by that and I'll continue holding the stock.

[eliteG]

MRVC has been a great pick!

On Friday MRVC made a tiny candle high up in the price pattern.  This candle helps form a 3 day ascending triangle.  Support could now be said to be located at the bottom of the gap @ 3.76 and at local low @ 3.95. 

With the stock trading at 4.45 and after such a nice run we would like to protect profits by placing an aggressive stop @ 4.15.  This level would be a break of the short-term ascending triangle and the hammer set on Thursday.  A stop at this level should allow members to unload before panic sets in potentially around 4.  This also leaves us ready to pick up MRVC if it does confirm support lower.   

Now we are ready in case MRVC decides to stall but it definately has the ability to burst through here 

[basonista]

Hmmm....  G.  Administrator.

FANTASTIC!!!!!

[jorgegr]

Hey, Elite G

Great to have you in this new position. Wish you all the best (and by the way
your sucess will undoubtedly increase also our profits)

Go man go !!

KRgds
Jorgegr

[eliteG]

Hmmm....  G.  Administrator.

FANTASTIC!!!!!

Hey, Elite G

Great to have you in this new position. Wish you all the best (and by the way
your sucess will undoubtedly increase also our profits)

Go man go !!

KRgds
Jorgegr

Thanks for the vote of confidence guys.    Looking to make us all some big trades this year! 

------------

MRVC has been a great pick!

On Friday MRVC made a tiny candle high up in the price pattern. This candle helps form a 3 day ascending triangle. Support could now be said to be located at the bottom of the gap @ 3.76 and at local low @ 3.95.

With the stock trading at 4.45 and after such a nice run we would like to protect profits by placing an aggressive stop @ 4.15. This level would be a break of the short-term ascending triangle and the hammer set on Thursday. A stop at this level should allow members to unload before panic sets in potentially around 4. This also leaves us ready to pick up MRVC if it does confirm support lower.

Now we are ready in case MRVC decides to stall but it definately has the ability to burst through here

MRVC - broke the triangle intra-day but didnt see much volume interest, retreated and closed inside the little ascending triangle.  Game plan remains the same with a stop @ 4.15. 

[cjm]

MRVC is down $0.30 pre market since the company just announced $74 million private placement.

http://biz.yahoo.com/prnews/060316/lath054.html?.v=47

IMO, this is still a great stock for the long run but could take a beating today.

[eliteG]

MRVC is down $0.30 pre market since the company just announced $74 million private placement.

http://biz.yahoo.com/prnews/060316/lath054.html?.v=47

IMO, this is still a great stock for the long run but could take a beating today.

Thank you for the news update cjm    You were right on.

---------------------------

update MRVC:

Took a beating today and ended .01 away from the days lows.  The only positive thing I could eke from this day on MRVC is that the candle is an inverted hammer.  I doubt that this fact will keep the stock from hitting our stop 5 cents away.    We will keep a close eye on MRVC. 

We will sell MRVC if it hits our stop @ 4.15.