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Well we certainly have a quandary now don’t we. We have the new Star Trek, which is generating MILLIONS of revenue but with a fraudlent Spock:
…or we have the old Star Trek
with a magnificent story line and low budget special effects.
If you ask me, I like the old one better but the world is turning and it’s time for the new one. I like the new one because it makes money. It kind of reminds me of $$$MR. MARKET$$$.
These are the voyages of the Starship Enterprise. In honor of Star Trek, today I bought Starent Networks (STAR) at 19.13. I will sell it in 4 – 6 weeks at 22.05. Here’s why I like Starent.
Starent Networks is a leading provider of infrastructure hardware and software products and services that enable mobile operators to deliver multimedia services to their subscribers. They have created hardware and software products that provide network functions and services, including access from a wide range of radio networks to the operator's packet core network. Is there anything people don't want to do on their cell phones? After cameras, music, games, calculators, e-mail, videos and even movies??
Let’s see what the chart says about STAR:
Clearly STAR was oversold and is now retracing to new highs and will continue to do so because it is a great company. Its stock is up 97% over the last 6 months and 30% over the last 3 months. It has the mo.
Not only is STAR a great company, it is a great company in a high growth market. That growth stems from the explosion of mobile data traffic as more people use smart phones. The trend is forcing wireless operators to expand their capacity to avoid bottlenecks. So even if STAR was a crap company it would still do well since the market for its products is growing exponentially. That’s right...Youtube on your Iphone. That’s where we are going with Starent products. Any device, Anywhere, Any Radio, Any Application. If you've used your cell phone to send a photo or a text, you can probably thank Starent Networks. The company's biggest customer, Verizon Wireless, is the largest cell company in the U.S. It also serves top and second-tier cell companies in places such as China, India and Europe.
Consumers and professionals are increasingly using mobile phones and other multimedia handheld devices to stay connected to each other, to access the Internet, to utilize business applications and for entertainment. At the same time, mobile operators are experiencing declining profits from voice services and increasing competitive pressures. To address these changes, mobile operators are deploying next-generation, 3G networks that are capable of delivering high quality, mobile multimedia services to subscribers. In deploying these new networks, mobile operators are seeking packet-based multimedia infrastructure solutions that can deliver higher performance and functionality than has been available from products repurposed from wireline applications.
Now usually when I invest in a company I like to know what they are making and how it works. However, I don’t have the slightest idea on how my cellphone, computer or TV works and I never will. So I can’t begin to understand what these guys make but I will take a stab at it. When someone makes a cell call, a radio signal reaches out to the nearest cell tower. That tower then routes the data to Starent hardware, which breaks the data up into packets and moves it on to the Internet. those packets travel, Starent's network tracks who the customer is and which services he or she is using to facilitate billing and customer management.
What I do know for a fact is that Starent makes a lot of money. They are going to bring New Networks, Higher Bandwidth and More Services to MORE USERS. There are more than 4 billion wireless subscribers worldwide, the company estimates. It figures it serves about 485 million of them, through its relationships with more than 85 cell carriers in 35 countries. That cellular count is expected to grow to about 5 billion in the next few years. Sales of so-called smart phones — those with Internet and other advanced functions that make them more like a laptop computer — are growing faster. More users are demanding more services, which need higher bandwidths.
Annual revenue has grown on from $34.4 million in 2004 to $59.7 million in 2005 to $94.4 million in 2006 to $145.8 million in 2007 to $254.1 million in 2008. EPS Growth over the last 5 years is 141% and EPS Growth for 3 years is 334%. 2009 is off to a ridiculous start:
Net revenues for the first quarter of 2009 were $73.2 million, an increase of 30% from the first quarter of 2008. Net income for the first quarter of 2009 was $12.8 million, or $0.17 per diluted share, compared to net income of $9.7 million, or $0.13 per diluted share, for the first quarter of 2008. In case you don’t remember, over the last 9 months, the world was supposed to melt. Well even if it was melting, STAR kept growing their earnings and their revenues. Must have been the dilithium crystals.
That’s right. Customers want it. Carriers need it. This market has high barriers to entry. STAR has multiple growth engines, significant operating leverage a focus on profitability and a strong balance sheet (zero long term debt). Return on Equity is at 19.6%. Return on Assets is 12.6%. Operating Margins are almost 30%. With a market cap of $1.3 billion they have already reached the big leagues. Oh yeah, the stock is cheap. This is a tech company that is growing its revenues and earnings like nobody’s business and its PE is only 22. Call it Swine flu, TARP, recession, concession, Obama, mama, or Michael Jackson’s llama. Whatever the reason, this stock is a steal. The ANAL-ysts are estimating $0.74 per share on $316 million in sales in 2009 and $0.85/share in 2010 on $378 million in sales.
Now $$$MR. MARKET$$$ will tell you what they actually will earn in 2009. Remember, they surprised to 38% on the upside so these ANAL-ysts don’t know squadoosh. STAR will actually have sales of $336 million in 2009 and then when all this recession crappola is in the rear view mirror, STAR will have ridiculous sales in 2010. With the margin growth they have been experiencing, the $336 million of sales in 2009 will generate earnings of $0.88/share. With a modest PE multiple expansion from 22 to 26, this would propel the stock price on earnings to a share price in excess of my target sale price. Voila…another $$$MR. MARKET$$$ winner.
To boldly go where no ANAL-yst has gone before. It’s only logical. Live long and prosper.
Remember…if you like this pick and it works out for you, please remember the Little Tigers as they hunt for a playoff spot: www.golittletigers.com.
I am HUGE!!!
$$$MR. MARKET$$$
…or we have the old Star Trek
with a magnificent story line and low budget special effects.
If you ask me, I like the old one better but the world is turning and it’s time for the new one. I like the new one because it makes money. It kind of reminds me of $$$MR. MARKET$$$.
These are the voyages of the Starship Enterprise. In honor of Star Trek, today I bought Starent Networks (STAR) at 19.13. I will sell it in 4 – 6 weeks at 22.05. Here’s why I like Starent.
Starent Networks is a leading provider of infrastructure hardware and software products and services that enable mobile operators to deliver multimedia services to their subscribers. They have created hardware and software products that provide network functions and services, including access from a wide range of radio networks to the operator's packet core network. Is there anything people don't want to do on their cell phones? After cameras, music, games, calculators, e-mail, videos and even movies??
Let’s see what the chart says about STAR:
Clearly STAR was oversold and is now retracing to new highs and will continue to do so because it is a great company. Its stock is up 97% over the last 6 months and 30% over the last 3 months. It has the mo.
Not only is STAR a great company, it is a great company in a high growth market. That growth stems from the explosion of mobile data traffic as more people use smart phones. The trend is forcing wireless operators to expand their capacity to avoid bottlenecks. So even if STAR was a crap company it would still do well since the market for its products is growing exponentially. That’s right...Youtube on your Iphone. That’s where we are going with Starent products. Any device, Anywhere, Any Radio, Any Application. If you've used your cell phone to send a photo or a text, you can probably thank Starent Networks. The company's biggest customer, Verizon Wireless, is the largest cell company in the U.S. It also serves top and second-tier cell companies in places such as China, India and Europe.
Consumers and professionals are increasingly using mobile phones and other multimedia handheld devices to stay connected to each other, to access the Internet, to utilize business applications and for entertainment. At the same time, mobile operators are experiencing declining profits from voice services and increasing competitive pressures. To address these changes, mobile operators are deploying next-generation, 3G networks that are capable of delivering high quality, mobile multimedia services to subscribers. In deploying these new networks, mobile operators are seeking packet-based multimedia infrastructure solutions that can deliver higher performance and functionality than has been available from products repurposed from wireline applications.
Now usually when I invest in a company I like to know what they are making and how it works. However, I don’t have the slightest idea on how my cellphone, computer or TV works and I never will. So I can’t begin to understand what these guys make but I will take a stab at it. When someone makes a cell call, a radio signal reaches out to the nearest cell tower. That tower then routes the data to Starent hardware, which breaks the data up into packets and moves it on to the Internet. those packets travel, Starent's network tracks who the customer is and which services he or she is using to facilitate billing and customer management.
What I do know for a fact is that Starent makes a lot of money. They are going to bring New Networks, Higher Bandwidth and More Services to MORE USERS. There are more than 4 billion wireless subscribers worldwide, the company estimates. It figures it serves about 485 million of them, through its relationships with more than 85 cell carriers in 35 countries. That cellular count is expected to grow to about 5 billion in the next few years. Sales of so-called smart phones — those with Internet and other advanced functions that make them more like a laptop computer — are growing faster. More users are demanding more services, which need higher bandwidths.
Annual revenue has grown on from $34.4 million in 2004 to $59.7 million in 2005 to $94.4 million in 2006 to $145.8 million in 2007 to $254.1 million in 2008. EPS Growth over the last 5 years is 141% and EPS Growth for 3 years is 334%. 2009 is off to a ridiculous start:
Net revenues for the first quarter of 2009 were $73.2 million, an increase of 30% from the first quarter of 2008. Net income for the first quarter of 2009 was $12.8 million, or $0.17 per diluted share, compared to net income of $9.7 million, or $0.13 per diluted share, for the first quarter of 2008. In case you don’t remember, over the last 9 months, the world was supposed to melt. Well even if it was melting, STAR kept growing their earnings and their revenues. Must have been the dilithium crystals.
That’s right. Customers want it. Carriers need it. This market has high barriers to entry. STAR has multiple growth engines, significant operating leverage a focus on profitability and a strong balance sheet (zero long term debt). Return on Equity is at 19.6%. Return on Assets is 12.6%. Operating Margins are almost 30%. With a market cap of $1.3 billion they have already reached the big leagues. Oh yeah, the stock is cheap. This is a tech company that is growing its revenues and earnings like nobody’s business and its PE is only 22. Call it Swine flu, TARP, recession, concession, Obama, mama, or Michael Jackson’s llama. Whatever the reason, this stock is a steal. The ANAL-ysts are estimating $0.74 per share on $316 million in sales in 2009 and $0.85/share in 2010 on $378 million in sales.
Now $$$MR. MARKET$$$ will tell you what they actually will earn in 2009. Remember, they surprised to 38% on the upside so these ANAL-ysts don’t know squadoosh. STAR will actually have sales of $336 million in 2009 and then when all this recession crappola is in the rear view mirror, STAR will have ridiculous sales in 2010. With the margin growth they have been experiencing, the $336 million of sales in 2009 will generate earnings of $0.88/share. With a modest PE multiple expansion from 22 to 26, this would propel the stock price on earnings to a share price in excess of my target sale price. Voila…another $$$MR. MARKET$$$ winner.
To boldly go where no ANAL-yst has gone before. It’s only logical. Live long and prosper.
Remember…if you like this pick and it works out for you, please remember the Little Tigers as they hunt for a playoff spot: www.golittletigers.com.
I am HUGE!!!
$$$MR. MARKET$$$
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