ORIONS Money Stocks

[Carter10]

XFN Due Diligence

From the CEO on the latest Q3 conference call:

"....we have sold to more than 30% of the market in a very short period of time. To give you a sense of the pace of subscriber rates, half of our growth over the past year came in the third quarter alone...."

http://seekingalpha.com/article/307992-xfone-s-ceo-discusses-q3-2011-results-earnings-call-transcript?source=yahoo

*******************************************
XFN is Owned 65%+ by insiders
*******************************************

From 2nd qtr 2011 conference call - Guy Nissenson (CEO)

"Yes, good morning. My question, Guy, is on the opportunity for backhaul in the new PRIDE build-out areas. Could you just give us a little bit more detail there on, what you see is the opportunity?
Guy Nissenson
Okay. So as you probably know with all the bandwidth growth that is happening due to the smartphones, iPads, BlackBerrys et cetera, the need for reliable fiber optic based backhaul system is paramount. And then where we built now in this PRIDE network and then both in Texas and in Louisiana, for the most part, there is no one that can provide or very few companies that can provide backhaul services to the degree that we can.
And what we are doing at the moment is starting to sign-up wireless companies to backhaul their mobile data services into their main networks. One of the good things about doing that, is that the incremental EBITDA is very high on these types of services because the fiber is already in the ground and for us it’s another way to use the same systems. So we are very happy with the two companies that’s already signed. And we expect to grow to more cell towers with these providers and also hope to sign additional providers as we continue to grow the PRIDE network out."

******************************************

XFN Article- "AT&T and Time Warner have nothing on xfone's growth" From Nov 29, 2011

http://www.smallcapnetwork.com/AT-T-and-Time-Warner-Have-Nothing-on-Xfones-Growth-TWX-T-XFN/s/via/1789/article/view/p/mid/3/id/70/

"Xfone, Inc. offers a variety of telecom services in the southeast and midwest, serving up everything from broadband to cable television to long distance plans. And, it's a legitimate presence in its target markets, not to mention a legitimate threat to the likes of TWX and T in those select markets. On the other hand, with AT&T being a $166 billion company and Time Warner Inc. being a $33 billion outfit, how worried can either really be by this $11 million micro cap name?

It's all relative to investors though, since fewer XFN shareholders means fewer shareholders to split the profits with. And, that may be just around the corner.

....Last quarter was a big leap in that regard, but the best may be yet to come now that the company's got some momentum with its product/offer mix. In fact, it's still accelerating. Its new fiber-optic business grew 30% compared to last year's level at the time, and Q3's fiber business grew 12% in comparison to Q2's total. It's good money for XFN too - the fiber-optic proportion of revenue was the same proportion as EBITDA, meaning its not costing the company more to expand than it's benefiting it.

...Xfone, Inc. still isn't a real threat to the likes of AT&T Inc. or Time Warner Inc. But, if aggressive investors were looking to add a little pizzazz to their value-oriented telecom holdings, growth-oriented XFN would be a savvy way to do so. It's combined growth-through-acquisition to a well-executed organic-growth plan, and the numbers are starting to show it (triple-play revenue up 30% last quarter, and total fiber business up 12%)... with persistent profits not out of reach."

****************
IMO Q4 should show substantial growth. The current $19M market cap is extremely low based on current metrics...and especially after Q4 it will just plain look silly. Also note that XFN receives grants and low interest long term gov loans for much of their work. The idea behind the company is great, as they roll out high speed internet and other services to smaller towns that haven't seen it before (there are a lot of them). Once XFN has the fiber laid down to each of these cities, it's simply recurring revenues each month as people add the service on its route.