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Gilat Satellite Networks Ltd. Message Board

  • smkcstr smkcstr Jul 14, 2012 6:58 PM Flag

    Analysts and Gilat

    There are very few analysts that cover Gilat, and the few that do are quiet (dead?)
    This brings the old story:
    An American travels abroad to the "wild country". A herd of sheep crosses his way. "Nice herd" - American said to the shepherd. The shepherd answered: "You know, I will give my best sheep if you can tell me exactly how many sheep are here."
    "No problem. There are 872 sheep in this herd" - said American. This answer took the shepherd by surprise. "Well, select the sheep you want", he said. After a long deliberation, the American selected one. At this moment the shepherd and his friends started to laugh loudly: "I can bet you, I know what is your profession. I can tell you, if you will give me my sheep back." proposed the shepherd. American agreed.
    "You are a Wall street analyst."
    "How did you know?" - asked American.
    "That's simple. You are very good with numbers, but you selected the wrong sheep" was an answer.

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    • There is an article in today's Motley Fool titled "Gilat Satellite Networks: Making Bucks More Quickly" by Seth Jayson. Excerpts from this article follow:
      When judging a company's prospects, how quickly it turns cash outflows into cash inflows can be just as important as how much profit it's booking in the accounting fantasy world we call "earnings." This is one of the first metrics I check when I'm hunting for the market's best stocks. Today, we'll see how it applies to Gilat Satellite Networks.
      In this series, we measure how swiftly a company turns cash into goods or services and back into cash. We'll use a quick, relatively foolproof tool known as the cash conversion cycle, or CCC for short.
      Why does the CCC matter? The less time it takes a firm to convert outgoing cash into incoming cash, the more powerful and flexible its profit engine is. The less money tied up in inventory and accounts receivable, the more available to grow the company, pay investors, or both.
      To calculate the cash conversion cycle, add days inventory outstanding to days sales outstanding, then subtract days payable outstanding. Like golf, the lower your score here, the better. The CCC figure for Gilat Satellite Networks for the trailing 12 months is 69.8.
      For younger, fast-growth companies, the CCC can give you valuable insight into the sustainability of that growth. A company that's taking longer to make cash may need to tap financing to keep its momentum. For older, mature companies, the CCC can tell you how well the company is managed. Firms that begin to lose control of the CCC may be losing their clout with their suppliers (who might be demanding stricter payment terms) and customers (who might be demanding more generous terms). This can sometimes be an important signal of future distress -- one most investors are likely to miss.
      In this series, I'm most interested in comparing a company's CCC to its prior performance. Here's where I believe all investors need to become trend-watchers. Sure, there may be legitimate reasons for an increase in the CCC, but all things being equal, I want to see this number stay steady or move downward over time.
      On a 12-month basis, the trend at Gilat Satellite Networks looks good. At 69.8 days, it is 4.4 days better than the five-year average of 74.2 days. The biggest contributor to that improvement was DSO, which improved 10.4 days compared to the five-year average. That was partially offset by a 4.7-day increase in DPO.
      Considering the numbers on a quarterly basis, the CCC trend at Gilat Satellite Networks looks good. At 69.0 days, it is 9.5 days better than the average of the past eight quarters. With both 12-month and quarterly CCC running better than average, Gilat Satellite Networks gets high marks in this cash-conversion checkup.

    • The same group of self-appointed analysts that told lies are probably still telling the same lies. Stop listening to the same liars.

4.68+0.09(+1.96%)Jan 29 1:58 PMEST

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