NVTL

[David Randolph]

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
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.

[David Randolph]

Good news out from NVTL yesterday:

• Verizon Wireless Offers First ExpressCard by Novatel Wireless to Take Advantage of New Faster Wireless Broadband Network
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.

[David Randolph]

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.

[David Randolph]

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.

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.

[David Randolph]

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

[David Randolph]

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.

[David Randolph]

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.

[David Randolph]

2007 EPS expectations for NVTL have risen 133% over the last couple of months:



Revenue growth in 2006 was 34.77%:

Income Statement - Annual

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.

[David Randolph]

NVTL just updated guidance:

• Novatel Wireless Updates Financial Guidance for First Fiscal Quarter
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

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 !

[Garoh]

David this stock will be traded above 30's this year 

strong guidance 

[dcrlin]

NEWS

http://finance.yahoo.com/q/h?s=NVTL   

[stocky]

David, is NVTL good enough for fire portfolio, or u will like it to close the gap and may be then load for fire?

[David Randolph]

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

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, therefore buying it tomorrow for the 3 Stocks on Fire Portfolio.

[la-onda]

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.

[la-onda]

first update (bought @ 16.29$)  :

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.