I ran a query on Zacks selecting those companies with a forward PER for this year of less than 17, a market cap of greater than $3.5 billion and a long term consensus growth rate of over 27%.
I got 11 companies on the list. All of them got most if not all of their revenues outside of America. Only two companies on the list were American, UTSI and PD (Phelps Dodge) both of which get almost all of their revenues from outside the U.S.
Their were two Chineese companies on the list and one Korean.
1. AUO 2. CPCAY 3. SHG (which is Korean)
There were also I believe a couple of Mexican and French companies on the list and one Russian and one Canadian company on the list
So we have
2 Chinese 2 French 2 Mexican 1 Korean 1 Russian 1 Canadian 2 American get most of their revenues outside of American.
It appears Nawar is correct. For UTSI's PER and stock price to go up UTSI has to diversify in a significant manor outside of China, specically into the U.S. of A.
I don't know if that will ever happen, at least not for a long time. UTSI's staed objective is to bring telecomm to 3rd world countries.
I would continue to look for a low PER for UTSI relative to the market and other growth companies as a whole.
UTSI is defintely a strong sell. There are a lot better fish to fry. Getting a 3G contract in China might help somewhat, but relative to other companies not as well managed or as profitable I believe UTSI's PER will continue to lag significantly for a long time to come.
UTSI and PD are completely different companies. PD is a cyclical commodity company. Their largest market is selling copper products in the U.S. If you add up all their sales by global regions, the U.S., Europe and Japan are most of their sales. Sure they do plenty of business in China. So does IBM, GM, Intel and many other companies. Your analysis is flawed.
PD was the one anamoly that came up on the search, Still 10 of the 11 fit the pattern I was talking about.
If you have a better reason to explain why UTSI is selling so low compared to other telcos please post it.
I would love to hear another opinion on why UTSI stock has been going down over the last 7 months despite managements executing according to their business plan or even better, except for not being able to make a serious penetration into India.
But I believe that this problem was known on the street as far back as last summer, though I could be wrong.
My analysis had never been presented on this board as a reason for the poor stock performance of UTSI and why institutions are selling.
Ahaha2 tried the economic theory, which could have some validiy. Nawar tried to explain it also by the one country one product theory.
Some have tried to explain the poor stock performance due to the projected slowing growth rate in UTSI sales and earnings vs the prior years.
So please give your theory we would all appreciate it.
If you haven't got a plausible theory that you can or want to present then please don't criticize other people's attempt to explain why UTSI stock has been going down the last 7 months.