I am really confused right now. PKT and ALLT, for example, are in spaces that by all estimates are expected to explode in the next 5 years. Huge companies like Oracle and Cisco are making acquisitions in anticipation of this explosion. The overall stock market is at all-time highs with all sorts of companies in all sorts of sectors with huge multiples and record valuations.
And yet, ALLT just hit a new 52 week low today, and PKT continues to go down daily, and is 54% off it's 52 wk high and closing in close to perhaps new 52 week lows. Furthermore, PKT's valuation is a staggeringly low $230m, which is cash + 1.5x 2013 revenues.
Can someone please explain, cause right now, perplexed does not even begin to describe my thoughts.
With some hindsight I think that it is fairly obvious that sellers are fearful of the slowdown and would rather exit now and re enter when the growth that is expected is proven. It will take time for that to happen meanwhile the share price could continue to fall, companies have traded for as little as their cash holdings in the past.
your right on about mkt growth in this space...the street (Wunderlich, Needham, et al) has used seasonal weakness, timed with a long in the tooth bull rally (cyclical or secular?) to question the bookings growth rate next 6 mo. for Allot and Procera. Allot had 4 major wins in 2012 and has 2 so far in Q12013 and WunderNeed says that win rate is barely enough..if you extrapolate, that's 8 in 2013 vs 4 in all of 2012 so what are they really trying to do? Accumulate like hell now and wait for Allot's next PR on Verizon win, that's what....or Procera's next biggy booking...
This space will rock again and sooner than you think.
I hate using short attack excuses though but this is classic stuff, especially with that Bloomberg PR last night on Allot.
Don't know why they wouldn't? They had $132m at year's end. Subtract off $12m for Vineyard and that gets you to $120m. In the 4th quarter they had non-GAAP net income of $2.4m.
Don't know what could happen for the cash position to decrease significantly in 3 months. I know they will have losses in the first half, but I think a lot of that is GAAP stuff and not cash related. But maybe I am wrong. Something funky is definitely going on with these stocks. Management silence and inaction also isn't helping.