actually not really...been following since it was $5 before the runnup but since have noticed the following:
1) Soros backing
2) Cash on hand due to secondary
3) Growth sector - product leadership
4) potential buyout candidate
5) Insider buying
6) Tableau vs DWCH head to head compare
Looking to dip in hands over fist today.....concerns?
I must admit that while i find your posts duplicative and somewhat annoying, you have been pretty on target with your predictions on Zhone so far. While its great that you have made significant $ (im guessing) with spot on calls, let others point out your 'atta boys' rather than your reminding us - being 'humble' has its advantages...finally leave the winding and unwinding terminology to wind up toys.
Well done in your tracking and ZHNE stock predictions and hoping your $4+ stock price becomes a reality.
yesterday's CC was one of the most disgusting CC's I have ever listened to. As a major shareholder, that was the last news / tone I wanted to hear. I wish i took the signals from the last CC that things werent right...
1) They are reducing breakeven only because te business isnt there - what a huge change from the $30MM qtr
2) Officers sold big time during the qt
3) They had no answers to the analyst questions.
Unless I want to take a huge loss, only hope now is a buyout. Growth isnot coming in the 2nd half of the year, just listen to the mgt's confidence (or lackthereof)....
any others feeling the same? or this board completely dead? The silence is telling
by the way, happy to reneter recently at $3.18 and $2.81 in addition to having a portion of my original $.445 shares.
MERU killed me last night w/ their report so hoping ZHNE can more than make up for it.
just wow. When I sold 70% of my holding at 6+ and 5+ I really felt that this would escape me on the upside and I wouldnt have an opportunity to reload, let alone at current levels. I saw it going to the mid 3.5's but no lower so this downtrend is surprising, even given the lackluster quarterly results.
Some things to keep in mind...
1) ZHNE was trading at $3.30's before Mory opened his mouth regarding the $20-40MM expectation on fiberlan. My point is that analysts ran with those expectations and the fact that ZHNE got JITC, they expected the rev to climb fast and furious. I still beleive this play is a year+ out when it gets heavy traction and people dont realize things take time to materialize, especially in such a competitve environment
2) Based ont he point above, ZHNE should be trading at $3.30's based on current fundamentals and little expectation on fiberlan, plus the bonus of JITC cert which was already planned. My point is you can confidently buy in at sub $3 for the mid / long term to make money
3) Reviewing the latest CC, people dont talk about it much but the margin story is key. The guide lower on GM% (still within target range) crushed the profitability picture given that they were already light on Q2 forecast since mid/high single digit growth would also affect the earnings and thus p/e valuation. I think this is a non-factor because Mory stated that pricing pressures have subsided and 35-37% should be the low based on in quarter product mix and transition. I would expect upper 30's from Q3 out.
4) I agree with Alak's thesis of 'building a stable base (legacy business) with whip cream on top (potential for fiber lan). It puts a floor in the stock price. For the long timers, at $2.7 ish, we are trading at $.55 pre split which is dirt cheap for a company that has invested several millions in its IP and product development.
5) Check out this link and presentation or google search....zhone fiberlan presentation.pdf
(cont part 2)
i am long ZHNE but also a realist.... the fact that so many are optimistic during the major selloff is a red flag that we will go lower. The argument against small volume price decrease is actually flawed - it is days where people throw in the towels and head for the exits that signal capitulation and a possible bottom.
There is too much optimism at these level that caution me to add more today.
each has their own opinion and this is just mine.
Given the huge jump, why wouldnt you be more optimistic. Guidance was provided over a month ago and the uptick occurred late in the quarter so perhaps these capacity increases that translates to 'deals' and revenue were not on their radar back then?
Again the jump is huge so I agree that if the variance was in the 10-15% range above / below it could be a blimp. Worst case is that guidance for the rest of the year would show better visibility and tone than the last CC leading to a stronger stock price down the road.
While I have been looking into AVNW as an investment, it appears that it would be prudent for the restructuring to take place and have better visibility into what right-sizing will take place, its affect on future revenues and margins.
The fact that management has paused guidance makes investing now risky despite the cash hoard. I would look to insider buys as a signal of confidence and the next CC. I might pay a higher price but it is worth the wait given mgt's inability to execute.
The statement of, the restructing will have impact on near term revenue makes next qtr look bleak despite recent PRs and new product introductions. Market is reflecting that.
Thanks for the response and that makes sense. I suppose if we were to get insights on the details of this counter from ZHNE itself we may have a hidden secret on how to trade ZHNE. To me, it seems like the counter within a period has a greater effect on guidance than in-quarter revenue and there are many considerations.
The volume you indicated this quarter is extremely high and has me curious on what it means for ZHNE's business
Is the counter measuring shipment volumes or the number of subscribers the product supports (subscriber capacity)? Assuming the latter and if so, does fiberlan support greater capacity indicating a stronger product mix in that direction based on the highest quarterly accumulation in a few years?
the biggest red flag coming out of the MERU CC was the fact that the company is relying on 2nd half of 2014 for return to growth. Here are the questions...
1) Do they imply QOQ growth or YOY?
2) With Q1 missing significantly, what does it say about Q@? Seems week...
3) Why are they reducing SG&A expense to $27MM? Either they are looking to increase shareholder value and earnings leverage (good sign) or they are right sizing the business in the light of a tough 2014 outlook (bad sign).
I was planning on looking at internal buys as an indicator to jump back in but after seeing Larry Vaughn (VP Sales) unload a sizable position, it gives me little confidence that the outlook is bright.
+3% is hardly a runnup. In fact you might get a dip. The story is similar to Zhone but with Meru getting strong traction on their 802.11AC product (comparable to ZHNE's Fiberlan). They crushed Q4 resulting in a Q1 shortfall. Margins are 65%. They are right sizing the business to $27MM break even and will have better than industry growth in the second half of the year.
To me Q4/Q1 results are a wash.... but the story and their new products are gaining traction. Plus the valuation compared to its peers - its a steal at these levels.
Similar story to ZHNE, just a little ahead in execution on new product developments
Come on man - you gotta do some DD on your own. Listen to a CC - public info
Great rev growth and just achieved non-gaap earnings. 802.11c gaining significant traction and growth trajectory for 2014 looks solid.
Good way to diversify some Zhne until it starts picking back the momo
Only posting this here since CALX board is dead. Given that ZHNE's recent announcement indicates that US market will remain weak, any potential that CALX reports weak guidance and falls further, leading to long term buy opportunity?
Any Zhoners out there also invested in CALX? What are the thoughts out there in terms of relative valuation between the 2 now?
gotta be a buyout IMO. I have been buying since the mid 1's and accumulating upward. The ability to actually purchase a decent amount of shares with decent bid / ask spreads is reassuring.
This will be above $4.5 (my target for takeover) soon. Volume preceeds price.