I could just republish virtually the whole writeup I did when Radyne last released earnings in August, it all holds true the same as it did that day. But you might as well just go back and read the original -- the Xicom acquisition is now looking even more brilliant and free cash flow is allowing them to pay off some of that debt and start building a cash position again.
I'm as pleased as I can be about these numbers. Growth is great if you excluede the Xicom numbers and if you include them it's spectacular. Even so, as we shoot past $12 in after-hours trading (you never know if that will stick, but it's fun to see), I see a company that is still very much out of the limelight and under-covered by Wall Street, in a growth industry, and with a recent acquisition that they're just starting to leverage into dramatic growth.
Radyne was a steal over the winter, and now it's just a good deal and an undervalued growth company. I will continue to sit and hold these shares with a smile on my face.
Shares came back to earth a little bit after the last earnings bump up, but I think people might start to really believe in the growth that's possible for RADN in the coming few years (and who knows, maybe the 2009 deadline for HDTV will really stick and the networks will sink some more money into HD equipment -- stranger things have happened!).
Going forward, I'm planning to try to ignore this little rocket and hope to look back in a couple years to see it at $25. My primary concern in August was the fact that RADN was no longer debt-free, but it certainly looks like they borrowed money for some very, very good reasons.
I'm going to have to come up with something new to worry about, which seems unlikely as long as this management team keeps hitting it out of the park -- so I guess I'll have to fall back on an old favorite, insider holdings. Radyne is heavily insider-held, which I think is usually great for a small, growing stock like this because management is really working for our best interests. So I guess I'll just hold off and start worrying if and when management starts dumping shares and heading for the exits, which seems unlikely.