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Aviat Networks, Inc. Message Board

  • CorporateRobot CorporateRobot May 7, 2009 9:29 AM Flag

    New owner soon

    Since I am a HRS shareholder, I am going to be the proud new owner of HSTX stock soon. So, I was just curious what other owners of the stock think about it.

    What are the long term growth prospects of HSTX? Did Harris just use HSTX to dump off some of its non-performing assets (kinda like Good Bank-Bad Bank)? If so, can HSTX clean house and move forward now that they are independent? Also, do you consider them a takeover candidate now that they are separated from Harris?

    Just wondering...
    TIA

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    • I've owned shares in this company for well over a decade.

      It was once called Digital Microwave Corp (DMIC), then Stratex Networks STXN), and then Harris Stratex Networks (HSTX). I bought DMIC about the time that Charles Kissner came on board; he managed the company very well and is still quite involved on the Board of Directors.

      This is NOT a takeover candidate... at least I hope not... and HSTX recently awarded some temporary shareholder rights to deter anyone from swooping in and gaining control at an unfairly low price when HRS distributes its dividend of HSTX shares.

      Hopefully the company will, in time, drop the "Harris" name. (Nothing against Harris, its just that it doesn't make sense to maintain the historical connection anymore.)

      What I've always liked about the company is that its one of the few "pure plays" in this area with enough size to compete effectively against the big boys. In fact, I think Harris Microwave Division was having it difficulties keeping up and the merger with Stratex Networks gave both groups a chance to bulk up and expand their markets. If you looked at the geographical distribution of their two markets at the time, there was little overlap. So the merger enabled both groups to expand their market base.

      If HRS dumped anything, it was a bunch of bad managers. But that's a bit of history and I feel the new leadership (Harald Braun) has been doing a great job. He's moving the company swiftly into higher-margin IP-based markets using the Eclipse platform (developed at Stratex) and positioning the company well to take advantage of the global economic/credit recovery when that gets fully underway. They should be a big player in the WiMAX market and should make inroads into the LTE market as well.

      As it must be, this company is constantly renewing itself and keeping its products in the technological lead to offer higher value to their customers. As products age, the competitors tend to catch up and compete more effectively... which puts downward pressure on product prices and margins. By investing R&D to constantly refresh their products, they not only offer more value to their customers but they do a better job of maintaining product margins as well.

      I've ridden this stock through many highs & lows... and I've not been too good about selling. (Although, in the early years, I managed to triple my money on DMIC in a short period of time.) Right now I own what is, for me, an enormous number of shares... so I'm reluctant to add more unless I can do so at bargain basement prices. However, I did buy some more shares recently when the price was below $4/share. Haven't decided when to sell, but I certainly have no plans to do so this year.

      If you are a patient investor, I think you'll be rewarded for holding onto the HSTX shares you receive as a dividend from HRS. If you are looking for a quick buck or need the cash, you should probably sell now.

      By distributing its ownership of HSTX to HRS shareholders, the number of HSTX shares available on the market will increase substantially. I think this is a good thing as it should draw interest from large institutional investors. Before now, a large investor could not take a meaningfully large position in HSTX without causing gyrations in the share price.

      User (that's my two cents worth)

 
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