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ARRIS Group, Inc. Message Board

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  • an_intellectual_jarhead an_intellectual_jarhead Apr 12, 2006 7:30 PM Flag

    a little patience, please!

    Actually, I would compare Arris to Seagate. Both industries are highly cyclical and price competitive. Both see big volume orders, sometimes with supply capacity limited. Both have few but large competitive.

    Because of its cyclicality, again, like Seagate, Arris has been assigned a terribly low P/E on 2006 earnings. And why? Well, if you take a look at 2007 and 2008 consensus estimates, you'll see generally flattish year-over-year comps. In other words, sell-side analysts don't have the balls to look further out.

    Like Seagate, I think Arris will continue to post solid numbers, with little to no price competition. As this continues, and as we see news of orders such as Comcast, know-nothing sell-side analyst will grow more comfident in the company's 2007 and perhaps 2008 outlook, enough to recommend the stock and for the P/E to expand on higher EPS estimates.

    Long 17,000 shares at 10.26
    Long 130 May 10 calls at 4.


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