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Vertex Pharmaceuticals Incorporated Message Board

aurorainsider 71 posts  |  Last Activity: 9 hours ago Member since: May 8, 1998
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  • Reply to

    no more shares

    by siemprefue Jul 18, 2014 2:42 PM
    aurorainsider aurorainsider 9 hours ago Flag

    It looks like we are going to flat line until earnings on rather low volume

    On an aside, Wells Fargo is holding a Small Cell investor conference today with various industry leaders from both government, vendors and providers.

  • aurorainsider by aurorainsider Jul 16, 2014 1:49 PM Flag

    Anytime you see a free fall like what Westell has gone through, people tend to push the panic button. Before you do so, think through this situation and ask some basic questions and draw some of your own conclusions. Remember when this restru Turing began, we were left with a Westell division that was doing roughly $9-$10 million per quarter or $40 million per year with landline products that were seeing erosion. Ask yourself what you think each component will do in revenues this year. Is it likely that the Westell division does between $15 and $20 million in revenues per quarter?? Is it likely that CSI will do between $10-$14 per quarter in revenues per quarter??? Do you feel that Kentrox may be on the low side of revenues, say between $5-$8 million in revenues over quarter?? If your answer is yes to all three of these questions, then you have just validated $140+/- million in revenues this year which by the way is what the Northland analyst targeted.

    Now if 18 months ago you were told that Westell could spend $65 million ( actually got approx $5 in cash in CSI deal) in order to add over $75 million in annual sales with a 50% margin profile, would you have invested?? Now do you have the right to be disappointed with the recent Kentrox softness?? Absolutely. But keep in mind, Kentrox did just $29 million in revenues in the full year before being acquired. While it kept blowing out quarters last year, I kept wondering how Westell could have bought them so cheap. So take a step back and think through the investment thesis. Eighteen months ago, would it have made sense to pay a multiple of 1X's sales for the business if it had 50% margins and if it could potentially open up new markets for other new products??? I say again, absolutely.

    So while we are looking at the Kentrox situation and are upset, step back and look at the entire situation. Cheers

  • Reply to

    Westell comps

    by aurorainsider Jul 13, 2014 12:21 PM
    aurorainsider aurorainsider Jul 15, 2014 6:13 PM Flag

    Phennes....I don't think that the company is being punished for a lack if a share buyback program. This is a concerted effort to drive the shares down to get the stock at a cheap price at the expense of weak hands. Was the stock punished for a couple of weeks after earning? Absolutely. I think the issue hear is that the Street does not like surprises. For some strange reason, Westell management has kept some policy in place of not providing guidance. This is fine on an uptrend, but if you disappoint, you get hammered. In some ways this is the Streets way of selling on the rumor given the last surprise and given management's continued lack of guidance

    Now would a buyback make a difference? Maybe. However last year the stock sat at sub $2 for some time even with a share buyback in place. Bottom line, the need to execute. Until there is evidence of this again, the stock will be a sitting duck

  • Reply to

    Westell comps

    by aurorainsider Jul 13, 2014 12:21 PM
    aurorainsider aurorainsider Jul 15, 2014 3:50 PM Flag

    I tend to agree with you when you see a free fall on no public information. The game continuescontinues and they wonder why the retail investor has not returned

  • Reply to

    Westell comps

    by aurorainsider Jul 13, 2014 12:21 PM
    aurorainsider aurorainsider Jul 15, 2014 10:36 AM Flag

    Agreed. One more acquisition that get them to a $200 mil + run rate positions them handsomely for an acquisition. If you look at say $200 mil at a combined margin profile of say 42%, you are looking at operational profit of $30 mil or approx. $0.50/ share. An acquirer could easily strip out $15 mil in Opex between consolidation of sales, marketing, finance and admin, which ups the earnings per share to approximately $0.75/shareshare. Throw a 20 multiple at that and you are looking at $15/ share in a buyout. These figures are not out of reach.

  • Reply to

    Westell comps

    by aurorainsider Jul 13, 2014 12:21 PM
    aurorainsider aurorainsider Jul 15, 2014 9:35 AM Flag

    What is it? Buy when you want to sell and sell when you want to buy

    On a side note: I know that there has been much consternation with regards to Kentrox with the two top dogs leaving. However, I didn't realize that Gilbert had been the president of Kentrox when it was part of ADC telecom (now Tyco) before it was sold to a private equity group Shaver also was at ADC and the followed Gilbert to Copper MountainMountain after. So in reality, Gilbert has been very familiar with Kentrox over time. Ultimately, if Kentrox proves to be a disappointment, then Gilbert is on the hook. Somehow I believe that Gilbert knew what he was getting in Kentrox and will prove to be a wise decision over time.

  • Reply to

    investcorp ripped off both WTT & WSTL

    by dreago27 Jul 8, 2014 10:08 AM
    aurorainsider aurorainsider Jul 14, 2014 5:51 PM Flag

    Good catch on Stump leaving. I'm just curious how you found this out unless you or someone that ylou know works there? This was not disclosed publicly. I'll be curious to see if he shows up with Cremona soon.

    We better get some visibility from Gilbert on Kentrox with the top 2 people leaving.

  • aurorainsider by aurorainsider Jul 13, 2014 12:21 PM Flag

    I took a look at the Westell comps included in the Northland analysis and looked at current Enterprise Value (EV), which strips out the cash position, divided by next year's projected revenue along with projected year over year growth rates. Westell's current EV sits at 0.53 X's forward revenues of $155 with 10% rev growth versus this year's projected revenue of $141. Now for the comps:
    Adtran (adtn) sits at 1.98 X's forward sales with 10% projected YoY growth; Ruckus (rkus) sits at 2.06 X's forward sales with 20% projected YoY growth; Sierra Wireless (SWIR) sits at 0.76X's forward sales with 15% projected YoY growth; Comtech (CMTL) sits at 1.3 X's forward sales with a 6% YoY growth rate; PCTel (PCTI) sits at 0.66 X's forward sales with a 10% projected YoY growth rate; Commscope (COMM) sits at 1.6X's forward revenue with a 5% YoY projected growth rate; Plantronics (PLT) sits at 1.7 X's forward sales with a 10% YoY projected growth rate; Calix (CALX) sits at 0.74 X's forward sales with a 10% YoY projected growth rate.

  • Reply to

    Short Interest At 2,479,517

    by phennes591 Jul 10, 2014 5:34 PM
    aurorainsider aurorainsider Jul 11, 2014 10:27 AM Flag

    Yes, it looks like the Hedgies are pouncing which means this probably needs to play out.
    I saw a program on the Galleon hedge fund and was absolutely amazed on just how rampant the insider information flies around among some of these institutional shorts.

  • aurorainsider aurorainsider Jul 10, 2014 12:42 PM Flag

    My guess is the initial contact came through Naveed Bandukwala. Both are graduates of the Univ of Chicago Booth and in his position, I could easily see Bandukwala reaching out to him that is if he didn't already know him

  • aurorainsider aurorainsider Jul 9, 2014 9:44 PM Flag

    The addition of Abid could actually prove to be pretty big for Westell. Remember that Google is looking to make broadband ubiquitous. One of the reasons in buying Titan Aerospace was to try to network lesser developed parts of the world. Additionally they took out a small start up, Alpental TechnologiesTechnologies, that is working on some interesting 5G technologies. The wireless technologies at Westell are a perfect fit to help Google achieve some long term objectives with their broadband initiative, particularly in the lesser developed parts of the world where laying Google fiber is cost prohibitive. Even if Westell does not eventually become a target, they will have a good perspective on the market.

    Typically, an acting senior manager needs to get corporate blessing to sit on another company's board. The fact that Google blessed this appointment tells me that there may be just a bit more behind this announcement. It is one thing to sit on a board of a company in an unrelated field, but in this case Abid is actively involved in the same industry. Also, the SEC filing references Avid sitting on the board of Mindspring before it was acquired. Now why mention this fact in an SEC filing? Ha?

  • aurorainsider aurorainsider Jul 9, 2014 1:30 PM Flag

    Yes, interesting announcement, particularly this part: Mr. Adib is currently the Global Head of Telecom Partnerships at Google Inc. It will be helpful to have someone who has the pulse of one of the world's leading tech companies.

  • Reply to

    investcorp ripped off both WTT & WSTL

    by dreago27 Jul 8, 2014 10:08 AM
    aurorainsider aurorainsider Jul 8, 2014 1:22 PM Flag

    Ah! Now it makes sense. Investcorp has a couple of people sitting on the board of Cremona's new company, so obviously he was recruited by Investcorp to run this new entity.

  • Reply to

    investcorp ripped off both WTT & WSTL

    by dreago27 Jul 8, 2014 10:08 AM
    aurorainsider aurorainsider Jul 8, 2014 1:10 PM Flag

    The RSU's and options that Cremona received will be left on the table since he left of his own accord to become a CEO of another company. I just think that he wanted to be the boss and hit one more home run before retiring

  • Reply to

    Cremona out

    by aurorainsider Jul 7, 2014 7:24 PM
    aurorainsider aurorainsider Jul 8, 2014 12:41 PM Flag

    You are correct, this has obviously been in the works for a while and he just waited for his vesting of a 25% position before announcing his departure. This is actually the best possible scenario given this news A guy like Cremona obviously doesn't want to play in the sandbox unless he runs it, so I can't blame him for leaving to become a CEO. He most likely got a package that made him whole on the shares that he left on the table with Westell. The volume is ultra low today, so given the market sell off over the past two days, this departure is a non event. He is not going to a compoetitorcompoetitor so there is no exposure. I trust that there are other competent leaders from Kentrox to pick up the pieces.

  • Reply to

    Cremona out

    by aurorainsider Jul 7, 2014 7:24 PM
    aurorainsider aurorainsider Jul 7, 2014 9:19 PM Flag

    Why would Cremona leave 230,000 grant shares and 90,000 options at a $2.44 strike??? Possible reasons: Reason 1: Cremona got a better deal somewhere else . Reason 2: He doesn't believe there is much upside to share price over the next three years of vesting to make it worth his wait Reason 3: Continued poor performance at Kentrox forced Gilbert's hand to get rid of himhim. Things that make you go....hmmmm??

  • aurorainsider by aurorainsider Jul 7, 2014 7:24 PM Flag

    I just saw the filing on Cremona's resignation. Typically someone at his level would have a non compete in place precluding him from going elsewhere in the industry. Well at least the company will save a half million in bottom line cost. However it does raise some questions. I am not aware of his personal contract details related to the Kentrox acquisition, but I would assume as CEO there was some sort of compensation related to a minimum stay( at least one year) post buyout. On the flip side, it does cause one to speculate whether or not the recent Kentrox performance had anything to do with this departure.

  • Reply to

    Good DAS Article On MSR Mobile Sports Report

    by phennes591 Jul 7, 2014 9:00 AM
    aurorainsider aurorainsider Jul 7, 2014 11:00 AM Flag

    I am interested to see how this translates into Westell and CSI sales. I'm thinking that we need $19 & $11 respectively to hit that $34 lone analyst target ( which would be greater than 50% growth YoY)

  • Reply to

    Good DAS Article On MSR Mobile Sports Report

    by phennes591 Jul 7, 2014 9:00 AM
    aurorainsider aurorainsider Jul 7, 2014 10:29 AM Flag

    Thanks. Nice read

  • Reply to

    Short Interest Stats

    by aurorainsider Jul 1, 2014 11:22 AM
    aurorainsider aurorainsider Jul 1, 2014 12:53 PM Flag

    With respect to Westell, you had the perfect storm for a downdraft. First, the Small caps saw a money flow reversal. Next, the telco comps all saw compression in their metrics, leading to a fairly swift price compression. Then you add in a disappointment in Kentrox, even though the company saw a record in revenues. By mid May, most of the funds could then determine the likely Russell 2000 changes based on MKT cap, even though the announcement would not come for a month. This confluence of events essentially left this stock defenseless and a perfect target for the shorts.

    Now with this behind the stock, the fundamentals indeed come into play. So with an anticipation of 40% plus growth, over $50 mil in cash with no debt, a $40 mil tax loss benefit and a growing position in a high growth market, one would have to think that these fundamentals will push the stock significantly higher over the next 12 months. Outside of company fundamentals, if you get some shift back to growth plays and some M&A in this space, you could get a price compression reversal leading valuations back to 1.5 timestimes forward (fiscal 2016)rerevenues less cash.

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