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MRVC - (recommended
to subscribers
on 8/8/06)
BOUGHT
at $2.26 SOLD
at $3.78
On July
26th, MRV Communications Inc., a provider of networking and optical
components, reported 2nd quarter revenue of $87 million, up 35% from
the 2nd quarter of 2005 and up 13% sequentially. Revenue was at the
high end of previous guidance. On a Gaap basis the net loss was $2.6
million or 2 cents per share which was down from a net loss of $4.1
million in the year earlier period. On a non-Gaap basis the net loss
was $1.7 million or 1 cent per share. The CEO attributed the revenue
growth to strength in both the networking and optical component
businesses. He also said the company is on track to achieve it's goal
of profitability in the 4th quarter.
During the 1st half of 2006 MRVC's largest
customer represented 14% of total revenue. Also during the 1st half of
2006 sales outside of the America's accounted for 66% of total revenue.
For the 3rd quarter MRVC expects revenue to be
$82 million - $87 million and a non-Gaap loss of 1-2 cents per share
which excludes option based compensation of approximately 1 cent per
share. This revenue range represents growth of 24% -32% over the year
earlier period. The guidance was also ahead of consensus estimates.
MRVC has cash & short term investments
worth $121 million or 97 cents per share. The company carries debt of
$44 million. The net cash & investments position ($121 million -
$44 million) is $77 million or 61 cents per share. Book value has
increased over the past year and now stands at $1.22 per share. A the
current level the stock has a price-to-sales ratio of 0.9 and a
price-to-book ratio of 1.8.
In the chart below you can see the stock has
approached the area that has provided support over the past 3 years.
The current book value of the company is higher than it was at the
previous lows of the past 3 years and the company is about to turn the
corner on profitability.
1/05/07-
SOLD AT $3.78 FOR A GAIN OF 67%. DURING THE SAME TIME PERIOD THE NASDAQ
WAS UP 19%.
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