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PCTEL, Inc. Message Board

  • commandor58 commandor58 Jun 19, 2007 6:04 PM Flag

    Stock Action

    As usual with PCTI, the stock moved lower over the last few weeks as someone else "knew" of the Sigma writedown in advance. In a nut-shell, that acquisition was a total bust. $20-$25 million down the drain. Because of that mistake all mgt options priced under $10 should be raised by such an amount to pay for that mistake. For example, if there are 4 million options with strike prices below $10, then they should all be repriced $6.00 higher.

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    • Getting cheap again, I picked up some at $4.00 today-took advantage of end of Q window dressing.

    • Wedbush conference starts in less than a hour-I am expecting mgt to say:
      1)Long-term outlook is good given trends in China, other 3G builouts, Wimax, and LTE potential
      2)Stimulas money will help state and local governments-stabilizing land mobile radio sales
      3)Stock is cheap selling at a 20% discount to what the balance sheet is worth and getting the business for free.
      4)Looking at acquisitions

    • Picked up some more at $4.10 today. Cash/share is $4.45 and net/net is $4.75. So buying the balance sheet at a 14% discount to its quick liquidation value and getting the business for free.

    • With the stock under its cash/share of $4.45, PCTI is probably under some end of Q "window dressing" pressure-I've seen alot of it so far this week.

      I've followed this company for years, it is well run and positioned and to get the business for free is a gift by the "market". Sure, 1st Q maybe just breakeven, but that will be the low water mark. Over any sort of time frame longer than that, being in the wireless equipment business will be a winner over the next speding cycle-PCTI can double and still be cheap.

    • PCTI, now under $5.00, is a buy again. Stimulus money will help state and local governments continue land mobile radio spending. WiMAX will roll out more slowly than this time last year, but with $4.00 cash/share PCTI is selling for 2X earnings/share.

    • Will with more than a 50% gain off the bottom, OK to take profits on some of your shares around $6.00. Many companies still selling for less than cash/share to recycle money into. Examples: NVTL, ELOS, DRAM, OPWV to name a few. Many others just above cash or selling for 1-2X cashflow.

    • PCTI got down to the cash/share today, so getting $80+ million business, that is profitable and cashflow positive for free.

    • Bought more at $4.57, with $4.00+ cash/share, PCTI now selling at 1.5X PE-extremely low for a well run well positioned company.

    • More at $4.85 today. Wireless data, according to AT@T, is up 30-40% y/y, that trend will continue and be good for PCTI. $4.00 cash/share means one is paying less than 2X PE.

    • Bought more at $5.19 and some at $5.10. PCTI is a well run company, that is well-positoned trading at lows not seen since 10/2002. With $4.00+cash/share, profitable and cashflow positive, the downside risks are minimal with upside however strong wireless is over the next few years.

      From a historical perspective, computer platforms have moved from: mainframes, minis, desktops, laptops and the next computer platform is the handset. Smartphones are just the beginning including the iphone. Wireless data, video, voice and interactive svs are going to grow in volume and complexity. PCTI with antennas, scanners and any other extensions of those product lines will do well over time.

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PCTI
7.65+0.19(+2.55%)Jul 9 4:00 PMEDT

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