Target $3 - $5 Mid 2013
Holdings - 500K shares
Avg Price - $1.9
With liquidity issues out of the way and business/product restructuring ALU will start looking like a normal company. Independent of how many folks slice and dice the balance sheet or margins or for that matter how they will structure their cash infusion the following metrics will drive the stock to $3 - $5:
1) Getting rid of the liquidity issues hence no risk of bankruptcy
2) Improved Margins
3) Stable Revenue
And I think all the above will be achieved in the next 2-3 quarters and if there's any sign of patents getting monetized you could see the stock even go higher.
Management is definitely old style and does not move fast to react to changing business environment but I think they are evolving. They however do have the service provider DNA which is a plus. Building and maintaining relationships with telecom service providers is very different than your average enterprise business. Innovation has been maintained at the company from Light Radio to High End routers to service provider cloud. If you peel the onion they definitely have a lot of R&D going for them. This company does understand what it takes to sell to service providers who require products to be 99.999.
Sentiment: Strong Buy
TINTINTALL, WHAT DO YOU KNOW??? WHO ARE YOU?? why would people listen to you???
You are talking SPECULATIONS, HOPES!
Why don't you GIVE THE FACTS:
Margins 3 times lower then CSCO,
No profit, only losses
No income from patents
3 billion debt coming due.....
Sentiment: Strong Sell
Everyone in the market is speculating, unless you know something for sure you are speculating. CSCO and ALU have diff product portfolios and their customer mix and sales life cycles are quite diff. My hope is that the margins will improve ending into a profit. Your hope is that a company doing $18Billion in revenue across the world selling some good technology should go bust. In the end its my dollars to your dollars, may the better dollar win.
Ben Verwaaayen was voted CEO of the Year in Great Britain.....Ben is in charge of
ALU......Ben has full control,,,,he is cutting cost,,,,selling assets...developing the latest
technology,,,,,restructuring the company....
Ben has to increase Revenue.......by 20,000 usd per employee.....thats 1.4 Billion USD..
Thats 1.130 Billion Euros....,,,,The Core Routers will generate that much....light radio
will help as well as Patent Leasing...Cost cuts are 800 Million euros....
So, its obvious,,,,ALU will make it big.,,,,very soon....
Lifeline from GS, it will only be a temporary issue. Only with a new management, we will see some improvement. Competition is very hard, from ERIC to the chinese vendors. Even, Nokia-Siemens is making a turnaround. My last hope is to get rid of this management. Ben is similar to Russo. Promises. No delivery.
I think time will tell, you could always do with more optimal management but from where they stand you either go bust or go up. We learn from our mistakes and the learning is even faster when there's opportunities. I dont believe the current management wants the company to go bust and if they do a few things right we should see upside on the stock. Just last year without the risk of bankruptcy and decent margins the stock was trading around 6. That was without the enthusiasm of a massive LTE build out. I tend to believe that without bankruptcy looming on their heads and better margins the stock should trend up. Again the key is avoiding the (perception) of bankruptcy.