Stock price when the opinion was issued
A free cash flow type company that is getting a little bit more on the growthier side with the recent acquisition of Mavenir. Believes that after reporting a few quarters with Mavenir, which is growing at 25%+, you are going to see revenue growth going from 1%-3% to maybe 5%-6%. That is going to cause a re-rating in the shares if they can execute on that, which he believes they can. Trading at 9X earnings. In an environment, where he is having a hard time finding stocks trading below 15X, this name really stands out as being depressed, undervalued and underfollowed.
Likes the valuation. Thinks the market has it wrong on how they value it. It is a sum of the parts type of valuation for this business. Acquired Mavenir which does “voice over IP” which was great because it was a growth vertical growing 20%-25%. He got spooked when he thought Mavenir was going to take a lot longer to work through the system. A very slow growth type business. This is on his back burner.
(A Top Pick June 17/15. Down 7.79%.) This has been in the news quite a bit in the last little while. There has been talk about them buying Pollycom (PLCM-Q). They paid a lot for the big acquisition of Mavenir, and the street hated it. It is taking a while to show the merits, and he believes they eventually will. Also, thinks a deal with Pollycom would be pretty good.
(A Top Pick June 17/15. Down 25.24%.) Got out of this quite a while ago, but it is still an interesting name. Had always expected they would find a good cadence of earnings and get that growing, but they still haven’t been able to get that. If you like companies that generate free cash flow and trade at low multiples, this is a pretty good name to own. However, you have to be able to put up with the volatility.
Year-over-year sales were down 11% and earnings were down 28% in November. For the coming quarter, earnings are expected to be down 13% year-over-year. PE is relatively modest at 9.9%, but growth is forecasted at 23%. If they can actually deliver that growth, the stock appears to be attractive, but with estimates being chopped, analysts are sceptical.
(Past Top Pick on Feb. 15, 2018, Up 29%) An acquisition last year accelerated their move into the Cloud which is higher growth. The market didn't appreciate this move until MNW announced a few solid quarters. Then it was announced a private equity company would acquire MNW. Currently, they're in a period where MNW can field other offers. He still holds it.
They focus on unified collaboration. They trade at a low multiple and he thinks they are not getting credit for their increased penetration of cloud. Public cloud companies trade at way higher multiples. (Analysts’ price target is $14.65)