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Sierra Wireless Inc. Message Board

  • kurtep kurtep Apr 5, 2014 12:13 PM Flag

    Excerpt From Artticle about MF's mystery stock pick

    An excerpt from David Gardner's (MF) growth stock article ny financial advisor will probably tell you that
    there is no such thing as “the last stock you will ever need,” and that this kind of thinking is dangerous to your financial health … but still, as every financial copywriter knows, hope springs eternal. We all want those 8,000% gains to make us more comfortable in our golden years (or to make it so we can afford to buy $70 egg trays without blinking an eye). Deciphering Motley Fool’s “R.I.P., INTERNET: 1 Explosive InterWorld Stock for 89x your Money by 2020″

    So after all that, what is our “secret” stock? Secret no more, this is: Sierra Wireless (SWIR)

    Sierra Wireless is a small Canadian tech company (yes it’s in a “small town North of Seattle” — Richmond, British Columbia), and they have indeed been on a tear this year, getting up to $20 a share for the first time since the financial crisis (they’ve dipped down a bit recently, shares now just under $18 as I type). They have a market cap of about $500 million, so quite tiny, and they’re expensive based on either trailing or forecasted earnings but do also have a large cash pile of about $6 a share (and no debt).

    If you account for the cash, you can say that the shares trade at a forward PE of only about 24 (50 cents in earnings in 2014 expected), which sounds a bit more reasonable than the numbers look at first blush, but it’s still expensive — particularly because analysts are baking in pretty low growth expectations for the future. So it looks like David Gardner is making a big picture argument that SWIR is going to see much higher demand for its products in the coming years, with good revenue and earnings growth, and the Wall Street (OK, Bay Street) analysts are forecasting something a lot more tepid.

    Sierra Wireless is going “all in” with this “Internet of Things” with the sale this year of their AirCard business (that’s their mobile broadband product) to NetGear, and that sale resulted in what looks like a huge earnings number this year (that’s why the trailing PE looks amazingly low — most

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SWIR
26.57+0.04(+0.15%)Oct 24 4:00 PMEDT

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