SIERRA WIRELESS INC (SWIR)

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Motley Fool Says SELL

Sell Sierra Wireless

Toby Bordelon • November 4, 2020 • SWIR

We moved Sierra Wireless (NASDAQ: SWIR) into the penalty box two months ago. Since that decision, we haven't seen anything that impresses us or makes us want to continue to own this business. Over the last six years, the business has failed to live up to expectations — both ours and the market's. A big problem for Sierra Wireless is that the driving force in the Internet of Things market is now on the software side. Hardware makers like Sierra have been pushed aside. Management hasn't been ignoring the competitive challenges it faces, but they haven't been successful in transforming their business, either.

Additionally, activist fund Lion Point Capital has recently invested in the company. It's possible that Lion Point Capital might end up taking the company private or forcing a merger, but it's also possible that nothing will come of it. We think that remaining invested in a disappointing company on the slim hope of a buyout or merger at a higher price is a very un-Foolish approach. We recommend that you sell your shares of Sierra Wireless.