AFRICANEWSWIRE.NET (April, 24 2012) Sasha Cekerevac, co-editor for financial newsletter and web site Penny Stock Detectives, believes that, as more people shift their use away from the traditional personal computer and towards the tablet and the mobile phone, the companies that provide goods and services in the broadband wireless sector are poised to grow over the next decade. In his recent Penny Stock Detectives article, Cekerevac encourages readers to look at technology stocks in that area for accelerating potential in corporate earnings; in fact, he has searched the sector and found one with great potential.
Aviat Networks supplies wireless solutions to carrier providing Internet protocol (IP) networking expertise. The company has over 750,000 installed systems worldwide and looks to continue to grow.
“I like penny stocks that have an established base, but that are also looking to grow their corporate earnings over time,” says Cekerevac. “A growth plan is essential when looking to invest in technology stocks. As new innovations arise, the technology stocks that can keep up and service this new growing market will benefit with accelerating corporate earnings growth.”
Aviat just recently announced a deal with Basin Electric Power Cooperative, an electric utility. Aviat will supply Basin Electric with a complete system to replace its existing network. This multi-million-dollar deal will continue for more than 15 years, according to Aviat. While this won’t send the shares up immediately, this is a sign that the company’s corporate earnings will improve over the next decade, as its products and services are in demand, noted Cekerevac.
For the second quarter of 2012, the firm generated positive cash flow in its main businesses. The overall revenue number was down, but that was on the international side of the business. North American sales were $44.2 million in the second quarter, compared with $40.3 million in the prior year’s quarter. International revenue declined to $60.8 million from $75.0 million in the year-ago quarter. CEO and President Michael Pangia stated: “Our global team executed as planned and we overcame the challenges in Thailand from the recent flooding.” The company estimates third-quarter fiscal 2012 revenue to be in the range of $100 million to $110 million with gross margins of 29.5% to 30.5%.
As many technology stocks have rallied from the lows in 2011, so too has Aviat. Some consolidation was in order following the big move upwards, believes Cekerevac. I would like to see some more deals done to drive corporate earnings, but, over the long term, this company does seem to be in the right market, with a solid management team. While I wouldn’t advise buying this stock right now, I would certainly have it on my watch list for possible future consideration.
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10, and the stock market in general.
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