Aaron Katsman
www.IsraelNewsletter.com
So here we go again. Just when I had pretty much thrown in the towel on Radvision(RVSN), the video-conferencing over IP and 3G networks company throws me for a loop with news of an insider stock purchase. The stock has gotten absolutely crushed this year down a whopping 40% YTD, due to a string of lower earnings guidance for the last few quarters. While the company enjoys a very close relationship with Cisco(CSCO), I am of the opinion that they have taken that relationship for granted and have lacked the focus and drive necessary to bring in other customers and grow the business.
A few days ago, the company received permission to purchase up to $30 million in stock. Skeptics among us may see that as a PR stunt to boost the stock, but in addition to the news of the company buyback, was the more interestingheadline that Yehuda Zisapel, a former Chairman of the Board of RVSN and the brother of the company’s current Chairman of the Board, bought $2 million of stock.
What to make of all this? On the one hand I can’t stand when companies talk a good game and fail to deliver. On the other hand, when the former Chairman puts in $2 million, I am intrigued. With the stock so far down, it may pay to start getting back in and slowly build a position. Of course as soon as I do, I am sure something else bad will happen, and it will start to drop again!
Please see our Disclaimer HERE.
Disclosure: Author has no position in any other stocks mentioned, as of 11/23/07.
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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.
Aaron Katsman
www.IsraelNewsletter.com
Leave it to the RadGroup to disappoint. After suffering through warning after warning, and earnings miss after earnings miss, Thursday’s Radvision(RVSN) earnings report finally did it to me. Like the poor sucker that needs to play defense all night against rookie phenom Kevin Durant, (SAVE OUR SONICS!) I am exhausted and ready to throw in the towel on Radvision. Ever the eternal optimist, even I am going to say adios to the video-conferencing company. It’s that time of the year so at least I will take a tax-loss( okay–a sizable loss) on the stock.
Boaz Raviv, Chief Executive Officer, commented: “Despite better-than-expected revenues for our TBU, on-target sales through our channel partner Cisco, and accomplishments company-wide, our performance in the third quarter of 2007 did not match our original expectations. This was due to slippage of some expected sales and the fact that our High Definition SCOPIA® Platform did not yet offer Continuous Presence, which resulted in lost potential sales in the third quarter, as we previously reported.
We now plan to focus on strengthening our reseller channel while fully supporting our OEM relationships. We believe our advantage as an independent network provider combined with the strength of our product portfolio will enable us to be successful in this effort, although we are realistic that it will take time to reach our goals.
Our fourth quarter forecast is based on this realism as well as our expectation that our sales through Cisco and those for our mobile product line and our TBU products will be in line with those of the third quarter of 2007.
We are fully determined to get back on track with our growth trend. We expect to do so no later than the second half of 2008. We are fully confident in our ultimate success.”
So their Q4 forecast is based on “this realism”, well what were this years previous forecasts based on? When we start hearing 2nd half ‘08, you can be rest assured that that will be an optimistic forecast.
What’s unfortunate is that Radvision’s technology is great, and their relationship with Cisco(CSCO), always gives hope of a potential M&A. But keep in mind, Cisco CEO John Chambers is no dummy. Why should he buy the company at a market cap of $260 million, down from $550 million 6 moths ago, when he knows that he probably will be able to get it even cheaper in a few months time.
Radvision is a stock to keep an eye on under $10/share, or as we approach Q2 ‘08. Until then, might as well take your tax loss and move on.
Please see our Disclaimer HERE.
Disclosure: Author has a position in RVSN. Author has no other position in any other stocks mentioned, as of 11/4/07.
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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.
