Opinions Robert McWhirter
Enablence Technologies Inc.ENA.VWAITAug 15, 2006
Involved in fibre-optics to the home. Interesting new technology. Would not buy until it is closer to the time when their first chips start coming out in ’07 and then wait to see if they can ramp up volume production.
Robert McWhirterOwned
$0.55
Stock price when the opinion was issued
computer softwareprocessing
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RISKY
A play that could be triple / quadruple. Optical chips for next, next generation. 100 Gig data rates. High risk.
John ZechnerOwned
computer softwareprocessing
DON'T BUY
Fiber optic technology right to your home, in rural areas. Young company. Not something he would normally follow, but knows the CEO. He was impressed with the way he manages his company. In this case the company had an acquisition but has not worked out the way they hoped. Still cash flow negative. He’s watching it for now.
computer softwareprocessing
WAIT
Rocky period recently, based on disappointment on earnings and contracts. She is positive on the new management team. Given current value of stock it is best to wait on this one.
Lesley MarksOwned
computer softwareprocessing
WATCH
New CEO is working on pulling separate units together to enable cross selling, which would be a huge advantage for them. Earnings had a loss of $0.09 in 2009, expected $0.01 in 2011 and $0.04 in 2012 giving a 17X PE, a 13% earnings growth. Watching to see how things unfold.
computer softwareprocessing
COMMENT
Analysts forecasting a loss of $.16 in earnings in 2009 April year-end. Expected to improve to $.09 loss in 2010. Doesn't like investing in companies that have losses. Latest merger is going along well and they now offer a broad sweep of solutions. Looking at rural telephone companies in the US as a sweet spot to take over existing customer base. Interesting technologies.
computer softwareprocessing
DON'T BUY
Started with a single product and then made 5 acquisitions in the last year. As fibre-optic net works are built out this company, theoretically, should benefit from that. Their problem is they are not susceptible to analysis and he does not know how much money they are going to make, etc. Potentially interesting.
computer softwareprocessing
DON'T BUY
Have a technology that is essentially fibre to the home. Seems to be better technology at lower cost. Still at the product testing part, so sales as yet. Could have good sales if it works and it becomes a leader. Investors became too bullish and that's why the stock has run up.
computer softwareprocessing
DON'T BUY
Able to integrate a lot of optical components onto one chip solution at very low cost. Acquiring Wave7 Optics, which potentially puts them in competition with their customers. Not sure this is going to be a successful move. Trading at 64X 09 earnings, so it is not cheap. Speculative. Below $1 would be an interesting entry point.
computer softwareprocessing
COMMENT
Have a product that would take fibre to the home. Has a high regard for the management team for what they have achieved and where they are going. It was always 2 steps ahead of where he could get his head around valuation. Leading edge technology. A “waiting on blue skies” story.
computer softwareprocessing
WATCH
Deals with fibre to the home for broader bandwidth. Issue has been cost. Have a chipset that from the fibre to the home can dramatically reduce the cost. Very early in the stages of revenue. The big run-up has been on the expectation of them landing contracts. He prefers to see more revenue and cash flow so he missed this one.
computer softwareprocessing
COMMENT
Chip to bring broadband into the home through fibre. The issue has always been the cost of bringing fibre to the home. Their chipset is a piece of the puzzle but is dramatically dropping the price of providing services. Doesn't have revenue yet. There is huge expectation on delivery but you are getting into risk of execution.
computer softwareprocessing
DON'T BUY
Their technology is the last piece of fibre to the home. Just announced a manufacturing agreement, in order to get high-volume production. It will be 2009 before profitability occurs. Very interesting technology, but it will be March-June/07 before they start up to sign large contracts.
computer softwareprocessing
