``We are finding that RADWARE's products complement our offerings to Internet Service Providers and enterprise users who require a fast delivery of information,'' said Dr Jerry Cohen, managing director of ABC solutions. ``We believe that RADWARE is a market leader and has the ability to remain so for many years.''
I don't like the looks of this one. These are the best of times and they are reporting decreased sales and revenues resulting in larger losses. They began restructuring and they have sold off the majority of their UK operations. As you may have noticed from the RDWR press release the UK is the fastest growing IT area in Europe. Another thing I really dislike about ELCO is the 24% decrease in R&D spending. Many companies (RDWR included) would be reporting profits if not for their R&D spending. But, it's that spending that insures their future prosperity. And as we can see from Amazon, Yahoo and the like future prosperity is more important than present prosperity. I know they are redirecting themselves and much of the losses are directly related to that effort. However, I would just as soon wait and see how future results reflect the current restructing. The fact that restructuring is necessary at all indicates to me that they have been too slow to change in the past. It's almost the opposite of ENON which is clearly more dynamic in it's attempts to garner market share. I wouldn't look to get in ELCO right now. Perhaps in the future when their management has proven themselves to me and the charts look right I would consider it. If I was already in then I would revisit the original reasons I had for investing and if they are no longer valid I would get out when the chart looked best. Those are my opinions for what they're worth. No matter what your decisions are I wish you the best of luck!
I like the positioning. Establishing themselves in the growing european market for internet access and leveraging that customer base by establishing an internet search engine, e-commerce site, as well as web site design and hosting services. Growth rate is great (323% year over year net revenue increase)! Don't like the increased loss on higher revenues, but that hasn't held back Amazon and I don't expect that to be an issue here. They are trying to establish market presence and a critical mass -doing pretty well I might add. I have typically avoided ISPs for investments. I don't like the long term outlook in that industry. I think AOL and the like will go the way of the dodo bird. Eventually I think ISPs will be beat out by the free internet model(note that this business model has not been proven out, YET). I may be wrong about that, but in any case I would still consider ENON as an investment because they have shown an ability to leverage their strengths and shift into growing markets in the recent past. The chart on this one doesn't give me a warm fuzzy feeling, right now it looks like it's sitting on support, but the next one down looks kind of scary at round about 14. If I was looking to enter I would wait to see what the next few days would bring. If it bounces I'd be getting in. If not I'd wait till it fell and volume got quiet(ie selling dried up) then I'd get in. But if I was in right now I would hold. I have a long term outlook, however. Nearterm there may be some pain(or not), it's hard to tell(short term moves are statistically insignificant). Good luck! I'll take a look at ELCO next.