Nice to see a little sanity here!
Raymond James has a very nice report out - speaks VERY highly of Velti and the process they are going through.
Velti is most likely to surpass 18 (thats not a typo). Too many people are overly focused on the short term. i) Velti has a competitive advantage, switching costs are high for agencies and mobile network operators - once you have customers on one system you don't want to change them. ii) Velti's market is doubling every 18 months (there is no way that Velti will not get its fair share), iii) Velti's issues have been around its costs (management decide to go global over 3 years - and they have achieved it a phenomenal achievement, but at a significant cost to short term profitability) they have also had poor financial discipline imposed on their sales organisation (this is what the new CFO is fixing, sales people are pushing back and saying that they will not meet target, blah, blah). In two to five quarters Velti will have doubled its revenues gotten its cost under control and developed strong cash flow. The only problem is that Alex has convinced CFO that they must acquire more companies with cash.
They obviously liked what they heard. I wish management would put the entire latest presentation on their site so we can all see it slide by slide and judge for ourselves. All day everyone said things sounded great till that last hr which we saw selloff imho
Sentiment: Strong Buy
Read the report. What's not to like. Basically says the company is increasing their long term value by implementing tougher controls on their contracts. Short term it costs in revs because they will walk past lower quality business.
In the end - the report says the pipeline is much higher quality and shareholder value will be enhanced by move.
Raymond James really likes this story.
This new CFO is an idiot just like CEO that screwed up that brought stock down from $10+ few months ago. Bunch of morons that's how I feel. Never seen a company that invites analysts to get company's value decrease by 35% in less than 48 hrs. Very idiotic move if you ask me imho
Do these analysts have any standard way of deriving valuations? If Raymond James analyst liked what he or she heard and reiterated price target which is more than 100% of currently traded price it makes me wonder why the other analyst downgraded after seeing the same presentation and listening to the same words. Doesn't make any sense to me and anyway I don't pay attention to these wallstreet firms that put out different ratings because they all have hidden agenda imho
We are smart enough to make an informed investment decision on our own. Wish everyone stops paying attention to them and guys like Cramer that change tone so quickly based on their agenda imho
Sentiment: Strong Buy