Tellabs isn't making any profit, therefore it just burns its cash to survive. The course has led to the lowest stock price in 10 years demonstrating no confidence moving forward. The reason it is trading near its cash value is that the sequential trend shows that the TLAB plan is to invest the 1.1B in itself. Thus, reading the tea leaves tells us that in about another 3 years there will be about 500 million left at this pace, and then the cash value is 1.50. So rah, rah, rah, all you want about cash. It is useless if it generates negative return. In this case, they have the cash in the wrong column - it should be in the "depreciating assets column."
Dude you are FOS. First, TLAB is at an 18 year not 10 year low. The last 2 quarters they were cash flow POSITIVE. They are playing it conservative with their guidance considering the environment. The Q3 restructuring gives them even more leeway in terms of not burning cash. Most restructuring take at least a year. Their main restructuring was announced less than a year ago. They are staying lean and yet increasing R&D some since it is the life blood of a tech company. When the telco spending bumps up they will start to see some nice profits especially since they have now focused company on the fastest growing segment in telecom which is 4G mobile. Stock still tredning down since the entire NASDAQ is selling off so the shares go down along with the basket trading. Stock could still move down if the market keeps tanking but considering that many of the large institutions keep adding to their positions, I doubt the stock will trend much lower. EASY double from here a year down the road if we don't have a global melt down and telco spending grows as it eventually will have to especially in 4G.
Total Change In Cash and Cash Equivalents (31,600) 53,700 (19,900) (61,500)
(Last four quarters)
Total Net Income Applicable To Common Shares (3,900) (4,700) (139,800) (4,900)
(Last four quarters)
Tlablong, I don't disagree that the company is aware of the trend. Unfortunately they have been aware for quite a while and the trend is still not our friend. The stock is off 60% since I first bought it with a "long view" and appreciation of the shift to overseas sales and increased revenue there. However, the losses in the domestic legacy market have continued without any abatement leading me to believe that the company and the entire niche of the company is under extraordinary pressure. Whether it will get a little kick here will only depend on whether the company has a goal to increase shareholder value. It will not be easy to double from here with all of the uncertainties you note. Moreover, the notion that institutions are adding to their positions raises the question why - to average down major irretrievable asset value perhaps. Then there is another question - if it is such a good time to average down, then why won't Tellabs buy its own stock and at least show some confidence in itself. I am all for conservative considerations, but not just for the sake of survival when the course is clearly not sustainable.
Don't expect to see much action through the end of year as anyone who wants out for the tax selling loss will be doing it. What a waste since 2004 and $8+ cost basis....Not even worth selling for a loss and might as well hope for a better 2013.....
I got this from Yahoo finace, They value the company at 65.23 Million? Not sure how they come up with that number. They got over a billion in cash, about 200 million debt. Over 1.1 billion annual revenue. Book value is $4.04. This one should be trading around atleast book value i my opinion. Thet are not buring cash either, they are not growing much. but money wise they are above water. I predict Jan 2013 we'll see $4 per share
Yahoo Finance Info:
Market Cap (intraday)5: 1.01B
Enterprise Value (Nov 15, 2012)3: 65.23M
Trailing P/E (ttm, intraday): N/A
Revenue (ttm): 1.13B
Total Cash (mrq): 1.14B
Total Cash Per Share (mrq): 3.11
Total Debt (mrq): 201.60M
Book Value Per Share (mrq): 4.04