NVTL

[eggman11]

David,

I know you are considering NVTL, for inclusion in the 3SOF portfolio. I have a question about the portfolio.

can the 3SOF can change depending on what is currently your favorite picks?

For example, a month from now GIGM runs to $40. The future PE looks a little high, but you find a new stock XYZ which is a better value at this point in time. Do you sell GIGM and buy XYZ for 3SOF, because it is currently a better buy?, while still holding to GIGM in the main portfolio, beacuse the fundamentals haven't changed.

Another example, would be if a main portfolio pick came out with higher than expected earnings which would increase your price projections significantly. If these new price projections are higher than one of the picks currently in the 3SOF portfolio would you replace the 3SOF picks with an already existing main portfolio pick.

I believe the best strategy for the 3SOF, is for you to review your picks for the 3SOF portfolio:

1) Everytime a new stock is added to the main portfolio - (Is this new pick a better investment than any current 3SOF stock.

2) On a regular basis- You should ask yourself at the end of the day. Are these 3 stocks still my favorite picks?

Beacuse of market changes and new information. I believe the 3SOF should be dynamic and updated based on whatever the current top 3 picks are.

[DragonAMG]

I bought some today @ 16.51 

This stock is very attractive.

[la-onda]

on fire


Novatel Wireless Updates Financial Guidance for First Fiscal Quarter
First Quarter Revenues Expected to Eclipse $100 Million Non-GAAP EPS Expected Above $0.35 per Diluted Share

SAN DIEGO, Mar 26, 2007 (BUSINESS WIRE) -- Novatel Wireless, Inc. (Nasdaq:NVTL), a leading provider of wireless broadband access solutions, today updated its guidance for the first quarter ending March 31, 2007.

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.

"First quarter revenue and net income will be the highest in company history," commented Brad Weinert, acting chief executive officer and chief operating officer of Novatel Wireless. "We believe this is a clear indicator of the underlying strength of our market and the success of our growth and diversification strategy. Our first quarter performance is being driven by strong shipments of the Company's EV-DO Rev. A ExpressCards and over $30 million in revenues from the Company's higher margin Ovation product line, including both follow-on orders and initial stocking orders. Due to higher than expected demand for Ovation devices by our domestic customers, some initial stocking orders, previously expected to be shipped in Q2, were accelerated and will be shipped within the quarter contributing to the higher-than expected revenue."

"With gross margins currently anticipated to be greater than 30% and strong leverage over operating expenses, we expect operating margins to top 15% as we are still scaling our internal infrastructure to meet the increased demand," commented Dan Halvorson, Novatel Wireless' chief financial officer. "We look forward to providing more detail on our first quarter results and updating annual 2007 Guidance on our first quarter conference call scheduled for May 1st."  product line, including both follow-on orders and initial stocking orders." [/b]

http://www.smartmoney.com/onedaywonder/index.cfm?story=20070326&afl=yahoo

[David Randolph]

I believe the best strategy for the 3SOF, is for you to review your picks for the 3SOF portfolio:

1) Everytime a new stock is added to the main portfolio - (Is this new pick a better investment than any current 3SOF stock.

2) On a regular basis- You should ask yourself at the end of the day. Are these 3 stocks still my favorite picks?

Beacuse of market changes and new information. I believe the 3SOF should be dynamic and updated based on whatever the current top 3 picks are.

I agree eggman11, that is the planned course of action, thanks for bringing this up. I'll also open the About the 3 Stocks on Fire Portfolio thread so one can discuss these matters in the proper place.

I bought some today @ 16.51 

This stock is very attractive.

Good move dragonamg

I saw the initial video analysis again, and I see I was calling for just 20% average annual revenue growth. Now the company gives me this:

«Revenues for the first quarter are expected to increase by over 150% year-over-year and by over 30% sequentially to above $100 million.»

Average annual revenue growth since 2003 was 80%, but that very high growth rate is accelerating, not slowing down as I expected.

But what is even more impressive is the margin expansion:

«"With gross margins currently anticipated to be greater than 30% and strong leverage over operating expenses, we expect operating margins to top 15% as we are still scaling our internal infrastructure to meet the increased demand," commented Dan Halvorson, Novatel Wireless' chief financial officer.»

You see, operating margin in Q4 2006 was just 3.3%, now the company is talking about 15% And they don't have interest expenses, they have interest income, so net profit margin will probably rise to 10% plus, and my long term estimate was just 7.5%.

So, we have much stronger than anticipated growth and much more profitability on each $ sold. This is a perfect fundamental storm

Now I see I really need to build a "long term estimates" model, so we can just go there, adapt the changes and get an end result. What I'm also thinking is that maybe I should have a 1 year estimate, 2 years, 3 years, 5 years, 10 years and maybe 20 and 30 years. This way we could, perhaps, go riding the wave of the most promising stocks on a 2 - 5 year estimate, but when growth started to slow, we would shift to new promising stocks. But now I think ... why shouldn't a stock with, say, a 30% a year performance just continue being better than most others?

I'll have to think more on the issue, these sure are interesting times.

As for NVTL, I believe yesterday's fundamental change should without a doubt make it double or more over the next 6 months, so I'm going to buy it to the 3 Stocks on Fire Portfolio too.

Thanks realcoolhead

[Garoh]

David does this make any sence to you ?

(("First quarter revenue and net income will be the highest in company history," commented Brad Weinert, acting chief executive officer and chief operating officer of Novatel Wireless. "We believe this is a clear indicator of the underlying strength of our market and the success of our growth and diversification strategy. Our first quarter performance is being driven by strong shipments of the Company's EV-DO Rev. A ExpressCards and over $30 million in revenues from the Company's higher margin Ovation product line, including both follow-on orders and initial stocking orders. Due to higher than expected demand for Ovation devices by our domestic customers, some initial stocking orders, previously expected to be shipped in Q2, were accelerated and will be shipped within the quarter contributing to the higher-than expected revenue."

look at this paragraph in red !!

maybe will we have a bad Second Quarter ??

[David Randolph]

When I first looked at it I also had that thought Garoh, but when we read the reasons behind your sentence highlighted in red:

Due to higher than expected demand for Ovation devices by our domestic customers, some initial stocking orders, previously expected to be shipped in Q2, were accelerated and will be shipped within the quarter contributing to the higher-than expected revenue."

In my view what this means is: orders were scheduled to be shipped in Q2, but demand at the final costumer was so strong that NVTL's costumers needed the product now so NVTL shipped it right away.

This doesn't mean demand will be less in Q2, in fact I believe it means it will be more, as the more demand the more demand in this phase of the product cycle.

Let's just check those "Ovation devices":

Novatel Wireless Fixed Mobile Convergence Products

Yummi

[Garoh]

They look interesting ....

I think this stock should be trading above 30's this before the end of this year 

[la-onda]

joke of the day:
Novatel Wireless downgraded to "market perform"

Tuesday, March 27, 2007 4:31:16 AM ET
Avondale Partners

NEW YORK, March 27 (newratings.com) - In a research note published yesterday, analysts at Avondale Partners downgrade Novatel Wireless Inc (NVTL.NAS) from "market outperform" to "market perform." The target price is set to $15.

[berloga]

The bro's at the analyst firm want to stuff their pockets with the stock before letting it fly. Greedy bastards. 

[realcoolhead]

You thanked me too many times and I have to say something:

You are so welcome. I am glad I made a little bit contribution to the board!

Thanks realcoolhead

[la-onda]

two upgrades:
1)
Novatel Wireless "buy," target price raised
Tuesday, March 27, 2007 4:50:14 AM ET
Montgomery & Co
NEW YORK, March 27 (newratings.com) - Analysts at Montgomery & Co maintain their "buy" rating on Novatel Wireless Inc (NVTL.NAS), while raising their estimates for the company. The target price has been raised from $16 to $21.
Ina research note published this morning, the analysts mention that the company has recently pre-announced robust results for the March quarter, with significant margin expansion. This stellar performance was driven by Novatel Wireless' varied portfolio of products including ExpressCard solutions and Ovation (FMC) products, the analysts say. The company's long-term competitive outlook continues to remain positive, Montgomery & Co adds. The EPS estimates for 2007 and 2008 have been raised from $0.63 to $0.87 and from $0.75 to $0.97, respectively.

2)
Novatel Wireless "accumulate," target price raised
Tuesday, March 27, 2007 9:47:03 AM ET
Research Capital
NEW YORK, March 27 (newratings.com) - Analyst Nick Agostino of Research Capital reiterates his "accumulate" rating on Novatel Wireless Inc (NVTL.NAS), while raising his estimates for the company. The target price has been raised from $14.75 to $19.00.
In a research note published this morning, the analyst mentions that the company has raised its revenue guidance for 1Q from $80 million to more than $100 million, significantly ahead of the estimates. The upward revision of the guidance reflects robust demand for Novatel Wireless' Ovation product line, and steady demand for the EV-DO and HSPA ExpressCards, the analyst says. The company expects its gross margins to improve from 28.9% exiting 4Q06 to greater than 30% in 1Q. The EPS estimates for 1Q07, 2007 and 2008 have been raised from $0.16 to $0.35, from $0.66 to $0.88 and from $0.86 to $1.00, respectively.

[stocky]

Its funny but I have been NovaTel Broadband card user for good six months and when David selected the stock I had feeling that I heard the company, where and when, I had no clue. But today when I looked back at my Verizon Receipts I found that I have been a proud owner of Novatel bb card. Small world.

[David Randolph]

Thanks for posting the analysts views la-onda. In my view they're still way below where they should be in terms of 2007 EPS estimates, which seem ridiculously low to me, even when considering the most optimistic of them.

There's just a bit of seasonality in NVTL's business, but just a bit. The most optimistic analyst you have there calls for $0.88 EPS for the full year 2007. But come on, the company already said it will make $0.35 in Q1 alone. It would have to make an average of just $0.177, almost half of the first quarter, to make just $0.88 in full year 2007.

My take is those estimates will continue to be raised to something more like $1.5 EPS for 2007.

The fundamental turnaround was very powerful in Q4 2006, but what is really awesome is the margin expansion in Q1 2007. Operating margin expanded from 3.3% in Q4 2006 to 15% plus in Q1 2007. This completely changes the valuation of a business.

I see NVTL share price doubling over the next 6 months. I believe I've never been so sure about a stock as I am with this one. It's a sure thing (a sure thing in the stock market means there's about 80% probability of you being right and the stock going up hehe).

Its funny but I have been NovaTel Broadband card user for good six months and when David selected the stock I had feeling that I heard the company, where and when, I had no clue. But today when I looked back at my Verizon Receipts I found that I have been a proud owner of Novatel bb card. Small world.

Yep stocky, as we embrace fundamental analysis more and more I bet you'll be more attentive to see if what you're buying is made by a publicly traded company

I'll keep letting the profits run on NVTL, the next billion dollar company!

[buddjas1]

News:


Novatel Wireless Expands Expedite Family of Embedded Modules With New E725 3G EV-DO Express Mini Card

http://biz.yahoo.com/bw/070328/20070328005402.html?.v=1

Novatel Wireless Announces Plug-and-Play Software for Ovation MC870D USB Modem and Merlin X950D ExpressCard

http://biz.yahoo.com/bw/070328/20070328005403.html?.v=1

[David Randolph]

I see NVTL as a sure thing. Now we need to consider the following words from Jesse Livermore:

«The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves because they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but the intelligent patience to sit tight.

Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations.»

I'll keep holding NVTL.