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The chart
at the time of recommendation
PKTR - (Sold on 6/09/08 for a gain of 44%)
BOUGHT
at $4.93 SOLD
at $7.10
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The following
is the commentary subscribers originally received.
On January 31st
Packateer Inc., a provider of Wide Area Network (WAN) hardware,
software, and services reported 4th quarter 2007 revenue of $40.9
million which compares to revenue of $42.7 million in the 4th quarter
of 2006. On a sequential basis revenue was up 12%. On a Gaap basis net
loss was $12.2 million or 34 cents per share. The Gaap loss includes a
one-time $9.8 million tax settlement charge. On a non-Gaap basis net
income was $309,000 or 1 cent per share which compares to non-Gaap net
income of $4.7 million or 13 cents per share in the year earlier
period. Gross margin was 71% which compares to 70% in the 4th quarter
of
2006.
During the 1st 9 months of 2007 the company's
2 largest customers accounted for 26% and 16% of total revenue. Also
during the 1st 9 months of 2007 sales to areas outside of the America's
accounted for 54% of total revenue.
The CEO stated that the company "turned the
corner" in the 3rd quarter and after showing sequential revenue
improvement in the 4th quarter the company expects to accelerate
revenue growth and return to profitability in 2008. Current consensus
estimates call for a profit of 19 cents per share for this year and 43
cents per share for next year.
Packateer has cash and short-term investments
worth $77.8 million or $2.15 per share. Book value is $2.41 per share
and the company carries no debt.
Below is a 5 year chart. The stock has
typically traded in a higher range. The recent significant market
weakness has brought this stock down to 1.2x sales which is very low
for a company with gross margins of 71%. At the current level the stock
has a price-to-book ratio of 2.
(originally recommended on 2/04/08)
6/09/08-
SOLD FOR A GAIN OF 44%. DURING THE SAME TIME PERIOD THE
NASDAQ
WAS UP 3%.
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