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I don't know.. I see your point but I don't think this can slide much further considering how far it has already fallen. There's considerably more value here than the street is giving credit for right now and we're bound to get a pop here soon even its only on a rumor. I tend to think of analysts as over zealous lagging indicators.
stockcharts.com p&f chart for PCS in the gallery view has a double bottom breakdown on June 11th and a target price of $0.50, which is just a probability target price from the p&f computations.
IMO PCS needs to show the money in earnings. Until we get back to hitting hitting EPS estimates, we have missed three of the last four earnings estimates, we are stuck.
Seems like a pretty nice buying opportunity here.
The chart is screaming oversold and hovering at the 2009-10 lows. The market is in better shape than it was in 2009 but people are panicked over the eurozone. We're sitting right at the cash value price, trading at only 8.3 P/E, and companies like Deutsche Telekom have already expressed interest in acquisition targets like PCS.
Can anyone think of reasons why this won't bounce to at least retest the November lows at $7.50?
Linquist said PCS needed about a $150 G4-LTE android phone(s) to attract subs. Now they have one. Time will tell.
double yikes
ET phone home
and use PCS
New G4-LTE $150 phone, after $50 rebate from PCS.
http://finance.yahoo.com/news/metropcs-introduces-latest-4g-lte-120000831.html
Not latest Android version and smaller screen, but this is what PCS needs so badly, G4-LTE phones at about $150.
$6.40 May close. Big 2.1M shares traded in last two minutes today on an up-tick. I am calling this the low for PCS, after almost trading down to it's cash per share value of $6.10 ($2.2B) today, source: Yahoo.
All depends if the Fed goes to QE-3 or not re: market collapse. IMO if Fed goes to QE-3 they will put off the eventual market collapse to a later date, a year or years ahead.
Re: buy-out. ATT and t-Mobile are GSM but are both moving to G4-LTE, whereas PCS is CDMA and G4-LTE. VZ is CDMA moving too G4-LTE, but IMO PCS is to small for them. S is still a mess after Nextel merger and has too much debt to buy PCS, but it would probably be the best fit.
All the communication sector is suffering right now.
MetroPCS is a good company I live in FL and I am a PCS customer
the phone works great except at work (walls too thick)
Eventually a BIG elefant will buy out PCS.
dont think it will survive 2012's market collapse alone which is coming. im not sayin PCS will go to OTC most likely bought out by
Verizon ATT or Srpint maybe.
8/2011 fall from >$16 was a paradigm shift for PCS to the negative. Run-ups always go to far (to >$18), run-downs always go to low (to <$7). When the tide is coming in, all boats rise; when the tide is going out, all boats go lower.
PCS needs to "show me the money," which it did not do in Q1-2012.
Analysis lowering 2012 estimates is killing PCS right now, even if analysis are usually "wrong." Moorman at S&P has lowered 2012 estimate to $0.25 from $0.89, because of Q1-12 earnings miss of $0.06. If his forecast is right for 2012 earnings, this would be the lowest yearly earnings for PCS since 2007. This is why PCS is very near it's 52-week low right now.
Heck, I can remember about two years ago when analysis were saying PCS' spectrum was worth >$10 a share!
Book value >$8; >$6 in cash.
I hope not but there are a lot of reasons why it could.
PCS is definitely an acquisition target so I can't see this trading much lower since we're already setting absurd lows here. But market sentiment rules over financials and charts so its hard to say how silly this will get. For telecoms, LEAP basically mimicks PCS moves but CLWR is its own beast. Never played that one. GL
I noticed you chime in on many of the same boards and have an eye for some similar plays. And I appreciate the mark. Reciprocated.
Have a good weekend
That makes sense, last year I had a vision, that in 2012 the market was gonna collapse even worst than 3-6-09
Right now CASH is king. PCS and CLWR are looking good but not as CBIS!!
Bottom? Is there such a thing right now?
I think Greece is effectively killing the charts. Quite a few good plays are blowing through supports like butter today. I think it's going to take a European revelation to snap investors out of this funk and back to reality. I'll have cash on hand when it happens but i'm not counting on any chart supports to stop this fall.
@ $6.45. Book value $8.16; cash per share $6.10 ($2.2B); debt $4.78B. (source: Yahoo)
They are throwing the baby out with the bath water right now re: PCS, which is at about $7. Over $8 book value and over $6 in cash (and about $4.8B in debt too). Still, it is time for PCS to "show me the money."
this could help us
(Reuters) - AT&T Inc (T.N) has held talks to buy smaller rival Leap Wireless International (LEAP.O) in recent months, according to people familiar with the matter, in the latest sign U.S. carriers are looking at acquisitions as a way to grow in a mature market.
I have no data to respond. Time will tell.
it sure did look like a pink sheeter yesterday with that 20 minute kaboom out of nowhere
Some interesting DD you have here. Say the merger does go through, what kind of timeframe are we looking at here? Could it be possible they've been in discussion for quite some time now and we could see this happen in the next week or two? Just wondering..
AP is reporting an all stock deal by DT (T-Mobile) for PCS, which has 363.2M shares outstanding.
@$10 a share= $3.632B
PCS has $2.2B in cash, making the value of the deal at $10/shr at $1.41B, less PCS' debt, which is over $4B and booked to 2016.
PCS has EBITA of $1.27B (ttm).
So DT spins off T-Mobile, which is then listed on NYSE after merging with PCS. Could be a brilliant move by DT, remember T-Mobile just received about $3B from ATT in $ and spectrum for the failed ATT bid for T-Mobile.
The dice are rolling ...
PCS @ $7.50. Didn't like today's price action, even with the big gain. Today's high was $8.45, so much of the 32.9M in volume was on the sell. Time will tell.
Posted by xgrk88a on Yahoo PCS mb:
"I believe the T-mobile / PCS buyout is real and likely to happen...
To start with, T-mobile and PCS are building on the same band. About 50% of PCS is on the 1900 mhz band...
http://forum.xda-developers.com/archive/...
and this shows that t-mobile is building their 1900 mhz...
http://www.technobuffalo.com/companies/a...
The reason that t-mobile is building out its 1900 mhz is because it needs it for its iPhone launch. With the purchase of MetroPCS, it will give T-mobile more 1900mhz spectrum. Who knows, T-mobile could ditch the low end customers at PCS and convert 100% of the 1900mhz to spectrum for the iphone (and increase ARPU greatly).
Additionally, Here are the value per user based on the major carriers:
PCS
7.8 billion market cap
9.3 million subs
$301 value per sub
VZ
$114.760 billion market cap
$95.825 value of wireless market cap
93 million subs
$1030 value per sub
T
$193.130 billion market cap
$121.672 billion value of wireless
92.8 million subs
$1311 value per sub
T-mobile
$48.720 billion market cap
$12,180 billion associated with t-mobile
33 million subs
$370 value per sub
I realize there are just rough numbers I have compiled based on a quick google search, but they should be close.
A merger of the two could create a close 3rd place player. Sprint could be purchased next in the roll up (with a value of only $131 per sub since they're losing money). A valuation of $700 per sub should be fairly quickly realizable by T-mobile after DTEGY floats a tracking stock. That would be a double of the valuation for T-mobile based on current prices of PCS. I would expect a buyout price of at least $12 based on my metrics.
This would be a smart move for T-mobile. Expect it to happen."
S&P "Proprietary model" has a "fair value" for PCS at $10 a share as of 5/5/12.
IF buy-out is the real deal, about $11-12 a share, depending on terms of the deal, cash, stock etc.
Well if they're going to buy it they sure picked a good time. This has gotten far too beat up over that less than glowing quarter. Besides, i'm tired of averaging down. I'd still like to see that 11 you were aiming for before the drop.
Interesting. It's also interesting how LEAP is mimicking the move.
Got this from TD Ameritrade:
Deutsche Telekom Said To Talk To Metropcs On T-Mobile USA Merger -Bloomberg TV>DTE.XE
Last update: 5/9/2012 12:09:00 PM
(MORE TO FOLLOW) Dow Jones Newswires
Well that would be nice. Where'd you get wind of that? I'm not seeing anything about that. Is it just gossip at this point?
Looks like a t-Mobile merger..
No idea but it sure put a smile on my face. Looks like an institutional investor decided to put in the bottom because I don't see any other news driving this. Let us know if you hear something.
No personal attacks. I did not catch your post in time to delete it, but one more attack on another poster on this mb and you are banned. bowonwing
less expensive "smartphones" is the pipe?
posted by gggl on the AXTI Yahoo mb: re-posting b/c: 1) some have said the key to PCS' success is sub $150, or less, "smartphones," in 2012 and beyond, I agree; 2) <<It is now abundantly clear from Apple as well as Qcom that there is a shortage of a very specific component that is "limiting" smartphone grwoth (sic). Likely Skyworks is the fabber of this component. However, this means that the rest of the components used to make smartphones are becoming much more readily available and even worse potentially stockpiling >> perhaps less costly smartphones are in the pipeline when this issue is resolved? Maybe good for PCS?
"Like I said I am outta here because people here ignore reality and then there are some that just want to censur me because they think they are doing other people a service.
First, the recent price declines and downgrades are no surprise at all. Take a look at the charts for TQNT and AVGO in the days prior to the TQNT CC, they clearly show major breakdowns of 2 of AXTI's major customers before the TQNT CC.
Then remember AXTI generates revenue from commodities and has at times large currency effects. In Q1 prices for Gallium continued to decline and the yen strengthened significantly, this means less revenue per volume on raw materials (a hit to revenue so likely low end of Morris's guidance) and of course the currency hit is straight off the bottom line. With Morris insisting on expanding his raw materials JV he has cut his usualy 3-4 sandbagging down to about 1-2 cents. That puts AXTI earnings guidance at significant risk to currency fluctuations which in Q1 will be a sizable. In short, given these known factors, AXTI is very likely to report revenue at the bottom end of the range and will likely miss on earnings.
That leaves only the hope of Q2 guidance for the short term rah rah story (long term you are fine this company produced 80 cents in earnings over a 4 Q stretch and can likely repeat that sometime relatively soon, i.e. within 2-3 years). It is now abundantly clear from Apple as well as Qcom that there is a shortage of a very specific component that is "limiting" smartphone grwoth. Likely Skyworks is the fabber of this component. However, this means that the rest of the components used to make smartphones are becoming much more readily available and even worse potentially stockpiling. In a semi environment that means pricing is deteriorating for those types of components, i.e. pricing pressure on AXTI.
This leaves us with a very weak Q2 and possibly Q3 on the revenue front scenerio. Further, a few more 7-8 cent quarters and you get projectable 30 cent type trailing earnings and at at 15 multiple that means $4.50 is generous.
For AXTI, which is in the Russell 2000 and HEAVILY affected by Russell 2000 ETFs (sorry money talks, BS walks), this posses a signficant risk of a boot from the Russell 2000 by the end of May.
I now predicted a Q1 miss on earnings followed by weak guidance. This will get you another nice move down (see Q3 results, pre and post). The risk is then if the Russell 2000 starts to turn south for the go away in May season that AXTI potentially could get the boot due to its valuation at the end of May. If that happens (actually the best thing for a long term player), index funds will unload AXTI presenting a great opportunity to load up and buy a stock that can produce 80 cents in earnings at a super discounted price.
I think the 52 week low is likely as low as it goes but if the stars align and AXTI's valuation is low enough to get booted form the Russell 2000 (requires sub $4 by 5/31), then $2 is in the cards and on massive flight, maybe even $1. Book value or cash won't matter. My bet is that if it gets the boot load up at $2."
Nice purchase...lol oops
S&P: target price $9- Hold. Moorman at S&P downgrades PCS to a Hold from Buy and new target price of $9 from $15. Seems like PCS' business model is being questioned now.
IMO this is just a bump in the road for PCS. In CC Linquist said the cost of subsidizing the smart phones was about $70M. If you add this to the $0.06 EPS PCS did earn, it equals about $0.28 EPS. Time will tell.
<<full 3G LTE based stations by Q3-12.>>
So there we have it, PCS is quietly upgrading it's old CDMA G2 network to LTE-G3.
IMO this is a huge positive for PCS because Moorman at S&P had been concerned with "congestion" on the old G2 network, which in his latest notes (before todays disappointment) had said he thought PCS had dealt with the "congestion problem." Seems he is right.
This is from the CC transcript, by the way.
PCS @ $7.08. Q1-12 $0.06 EPS or $21M, "street" avg. est. was $0.17.
Churn was 3.1, lowest in company history. LTE churn was 2%;
+132K subs, to 9.5M subs;
$262 EBITA, -8% yoy, $2.2B cash;
1.5M upgrades in Q1 added to company costs;
2nd half of 2012 LTE smartphones sub $150;
full 3G LTE based stations by Q3-12.
Could be overbought @$12 right now per stockcharts.com PCS chart. Weekly chart not quite so overbought.
Moorman at S&P just raised target price to $15 from $11 and raised 2012 EPS estimate and initiated 2013 EPS estimate over $1.00.
i sold - gap too big not too
PCS at about $12; $12.75 resistance; support is at $11.25, which was the old recovery high before this weeks run. In this range PCS is filling the gap.
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The deal is expected to close in the middle of next year, 2013.
James Moorman at S&P lowered his 12 month target price of PCS to $12 from $13 on 11/2/12 and still has a "Hold" rating on PCS. He says the deal values PCS between $11.50 to $13.50 a share. He also said he thinks Sprint will not offer a competing bid for PCS.
On November 30, 2012, Shing Yin, an analyst at Guggenheim stated that Sprint could make a new offer for PCS between $12 to $13, which he calculates would equal about a 45% stock offer from T-Mobile instead of the current 26% per the current T-Mobile/ PCS deal. Thus, Yin believes PCS is worth about what it is trading at on 11/30/12, about $10.65 a share in the current T-Mobile/ PCS deal. SEE post #466.
Joel West wrote on October 3, 2012 in his Seeking Alpha article: "I would presume that DT hopes that it will be able to gradually unload its 74% holding in the combined company through open market sales."
It is expected that once the transaction is completed the ticker symbol for PCS will change "since T-Mobile USA will retain its name, technology, HQ and CEO - while MetroPCS will lose all four." (West)
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