Phew! Thanks for the link Curtis, a very good plug for Netcom, although I'm puzzled why they think PSIX is the next takeover candidate and didn't even mention NETC as a potential target.
I'm with you 100% on Q2 and NETC's prospects in the long. I hope to add to my position this week, around 14. Below 14 to me is a no-brainer at this point. I'm sure a lot of analysts are back at their drawing boards (I guess they actually probably use computers now) reworking numbers. By mid-month I wouldn't be surprised to see some revisions/upgrades coming out. I feel very bullish right now, here's why: 1) If the UK charge was a one-time deal, then we shouldn't have to worry about that in Q3 (except for $300k). This charge alone was worth -$.15 in EPS, right? 2) Company has stated (in the conf. call I assume) that Q3 revenues would be flat as they continue to transition to business customers. OK, even then, all other things being equal we should hit around -$.64 (Q2 earnings w/o UK charge), with 1997 coming in better than -$2.86 (1H 97+(2xQ2 w/o UK charge)). 3) I believe that we will have another buyout/merger in Q3, or if not, Q4. Probably NOT Netcom, because DG is holding out for $$$. I think he will ultimately get it, but not this year.
Wall St. has put the burden of proof on DG with their "show me" attitude toward the stock. Well DG and Netcom have shown them 3 quarters in a row that the turnaround is well under way. This should fuel renewed interest in a quality company. I'm expecting to break past 20 by the end of Q3.
We'll see...
'til tomorrow,
MK |
