zeev - speaking of malaise ...
Just finished the UTSI conference call. 1st rate management. Butt kicking franchise, great strategic vision, great accretive acquisitions, great organic growth, etc., etc. ad nauseum, and the stock hasn't been able to get out of its own way lately, including another 3.5% down in AH as "reward" for beating even the enormous growth estimates, and confidently reinforcing guidance.
This is a hell of a franchise, but the market is in such a funk it's just spitting on it.
In some ways, an analogous position to SNDK on margins -- market seems myopically fixated. But here, the management team is much "stronger" in responding. Here is the CEO on the conference call:
"Our objective is to grow both revenue and profit and to finish 2004 as a stronger, more formidable global equipment provider. We are not going to be constrained by gross margins as a percentage of revenue. Many companies have good gross margins and are still not profitable. UTStarcom has been able to maintain net after tax margins of 9%-10%. We believe shareholder value is driven by dominant market position, revenue growth and profitability. Let me repeat myself ... I'm driving my team for top-line growth, profit growth, and positive cash-flow."
In other words ... WTF should you be concerned about us letting go of a percent or two on margin while we grow top-line at over 80% and bottom-line at 50%, and more importantly, grab for dominant marketshare ... which down the road will pay you back with the higher margins that dominant franchises get to charge?
To which I say amen. And if you want to crap on the stock and knock it down some more, I'll be happy to go rent the truck to back up and do my buying. :-)
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