Can Alvarion (ALVR) Compete? Yes
Written by: Aaron Katsman | November 1, 2007
Aaron Katsman
www.IsraelNewsletter.com
As if the market isn’t bad enough today, along comes Merriman, Curhan, Ford & Co. and downgrades Alvarion(ALVR) saying that they don’t believe that Alvarion can compete with the big-boys. They say that telecom giants like Motorola(MOT), Alcatel-Lucent(ALU) and Nortel(NT) have the global mass needed to squeeze out Alvarion. These global giants definitely have lots of girth, but clearly though, for investors trying to make some money, it’s time for them to trim the fat. Over the last 2 years the “BIG 3″ have lost investors about 20% both in MOT and ALU and 50% in NT. This compared with Alvarion’s stellar 60% return. Just like a good defense in football; it’s better to be fast and agile than big and slow.
What they are missing is that Alvarion’s strength comes in emerging markets. Markets that the big-boys aren’t ready to play in. The company finished the 3rd quarter with 200 commercial deployments, up from about 170 at the end of Q2. It sure sounds to me that they are competing just fine. Giddy up!
Commenting on their results, CEO Tzvika Friedman said, “We are pleased to report another quarter of record revenues and we are on track to achieve our 25-30% growth objective for 2007. BreezeMAX revenue was more than double the level of a year ago. WiMAX shipments remained at a high level and we ended the quarter with over 200 commercial deployments, up from about 170 at the end of Q2. Many of these deployments are still in the early stages, and represent significant opportunities for future expansion.”
As a betting man, I wouldn’t be surprised if one of the “BIG 3″ actually buys Alvarion, if Cisco(CSCO) ends up passing on them. After speaking with collegue Zack”Facebook” Miller, he agrees that one of these guys may try and make a play for Alvarion.
Sure looks like the business is very solid. Maybe, because I like underdogs, but at around $11.40, this looks like a steal.
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Disclosure: Author has a position in ALVR. Author has no other position in any other stocks mentioned, as of 11/1/07.
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Aaron Katsman is the lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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