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PCTEL, Inc. Message Board

  • commandor58 commandor58 Nov 21, 2012 12:19 PM Flag

    Mobile Data Traffic

    Is expected to grow at 50% CAGR over the next 6 years according to study released by ERIC today. PCTI plays in both outdoor and indoor with scanners, antennas, service and if PC Secure goes well-security. Even if PC Secure doesn't go well, the core business will do well-making PCTI a double digit stock is 12-18 months.

    Sentiment: Buy

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    • W/I today's durable goods orders, for Oct, communication equip was up a very strong 11.4%. CapX in wireline/wireless networks has started to accelerate-good for many companies. EMS, chips, direct suppliers and PCTI.

      • 1 Reply to commandor58
      • Through earnings reports as of today, at least 3 companies (ADTN, XLNX and CLS) are forecasting upward sloping spending in the wireless infrastructure space. XLNX sees an uptick in the March Q vs the just ended Dec Q and CLS sees a rebound in the 2ndH of 2013. Some of the commentary has implied T's spending is ramping up to to catch up to the quality of VZ's network. Some commentary has suggested China will finally roll out their LTE equiv starting the 2ndH of 2013 and other comments imply that some European carriers will start upgrading their networks as well.

        PCTI plays directly into all of these network buildouts with their scanners and some antennas lines. Other antenna lines play into industrial and indoor wireless buildouts with some services mixed in as well.

        Bottom line, as I've written for months, PCTI is very well positioned for continued outdoor and indoor wireless build outs around the world and will follow 3rd Qs sales and earnings beat with another one in the 4th Q. Now with T ramping up their spending early this year, starting the Mar Q, PCTI's seasonally slower 1st Q vs the 4thQ, may be less of a decline in years past. Couple that with a very high probability that the 2ndH will have many geographies ramping up spending including Spring and T-Mobile adding to T's NA thrust and the odds are good that PCTI will beat current consensus estimates-even if they are raised after the 4thQ.

        I think EPS will be closer to $.60/share this year, so given a fair PE of 15, the business is worth $9 and the liquid part of the balance sheet is worth $3.50/share. Hence, end of year target is $12.50.

 
PCTI
7.40-0.03(-0.40%)May 29 4:00 PMEDT