Here is more research why NVTL is a sell.
NVTL Ford Equity Research Reiteration 9/19/14
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We project that NVTL will strongly underperform the market over the next 6 to 12 months. This
projection is based on our analysis of three key factors that influence common stock performance:
earnings strength, relative valuation, and recent price movement
Recommendation Summary
Ford's Strong Sell on Novatel Wireless Inc. is the result of our systematic analysis on three basic characteristics: earnings strength, relative valuation, and recent
stock price movement. The company has suffered a very negative trend in earnings per share over the past 5 quarters. Because the company lacks sufficient analyst
estimate data, we place greater weight on the historical EPS trend as the measure of earnings strength. Based on operating earnings yield, the company is
overvalued when compared to all of the companies we cover. Share price changes over the past year indicates that NVTL will perform very poorly over the near
term.
Earnings Strength is VERY NEGATIVE
Ford's earnings momentum measures the acceleration or deceleration in trailing 12 month
operating earnings per share growth. The downward curvature of the plotted points in the graph
on the right indicates that while Novatel Wireless Inc.'s earnings have increased from $-0.97 to
an estimated $-0.95 over the past 5 quarters, they have shown strong deceleration in quarterly
growth rates when adjusted for the volatility of earnings. This is an indication of weakness that
could lead to declining earnings.
Nearly 40 years of research have shown that the change in the growth of earnings per share is an
important factor that drives stock price performance. Ford measures earnings momentum and
analysts' forecast changes to get an early indication of changing earnings patterns.
Estimate data for Novatel Wireless Inc. is not available. However, the lack of analyst forecast
changes and a comparison of reported versus expected earnings does not inhibit our ability to
assess NVTL's earnings strength. As a matter of fact, our research
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herein are subject to change without notice. The research process used is derived solely from a quantitative approach that uses historical data to produce a stock
ranking system. Each covered stock is assigned one of five ratings based on relative scores, Strong Buy, Buy, Hold, Sell, and Strong Sell. While stocks rated Strong
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an individual stock basis or on average. Past results are no guarantee of future results.
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