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  • gandhip gandhip • Feb 11, 2013 9:15 AM Flag

    MERU Potential...

    If MERU is truly a turnaround and they are to achieve EBITDA profit by 2nd half, we are looking at a great investment opportunity here.

    ARUN - P/S = 4.5
    RKUS = P/S = 9.5
    MERU = P/S = .6

    Understand these are profitable companies but if MERU were to trade at the following mutiples, the price would be:

    1.5x Sales = $8.55
    2x Sales = $10.6
    3x Sales = $17

    I personally think that the last few quarters has justified MERU's turnaround and if they can get to EBITDA b/e, we see $11 by Dec. If they hit $120MM rev and 2014 projects growth, we could be north of $15.

    This all assumes the market cooperates and with the sector booming (look at RKUS) we could easily trend to $5-7 in 3 months. This is a low risk proposition and once of the best NASDAQ plays I see at the moment. If you are interested in another turnaround play, check out ZHNE as well.

    Thoughts?

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    • gandhip gandhip • Mar 13, 2013 9:27 PM Flag

      Wow... Read this post and then read the recent analyst brief from William Blair and you will see the same rationale for why this is a double in 2-3 months. Great when others thinking the same on why it's discounted and where it can be headed.

    • gandhip gandhip • Feb 20, 2013 9:25 PM Flag

      Today the leashes were lifted on MERU broke out. The reason for the increase could be renewed confidence, market catchup or a potential suitor. On the last point see how rkus and arun trended lower? Could it be that one is looking to acquire meru on the cheap? Whichever the 3 reasons, it was a great opportunity to load on MERU in the 2's and those that did are reaping the benefits. I sure did...

      In fact the market is offering investors a golden opportunity to get a preview of the turnaround before their stocks trend higher. Take MERU and zhne as examples, where you could have bought after earnings and still made a huge % gain once the good news came out! I like those odds.

      MERU is in a huge sweet spot and I now hold a ton of shares just like the insiders who purchased on the cheap. Hopefully we hit 5 within a week and I can play the rest with house's $

      Glta

 
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