On Thursday Clearfield (CLFD) posted revenue gains of 45% year over year. Most likely, this marks the end of the lull that was caused by USF reform that caused companies like Clearfield, Calix (CALX), and Adtran (ADTN) to have disappointing results in 2012. While both Clearfield and Adtran mentioned that there are continued clarity issues as it relates to regulatory reforms, it appears that Tier 2 and especially Tier 3 customers affect but by these reforms, are starting to reengage.
During 2012 and the early part of 2013, Clearfield has significantly beefed up its product portfolio. Its FiberShield portfolio with microduct, microcable, and pushable fiber connections is an efficiency solution for micro trenching applications. An example of its viability was featured in a Fierce Telecom article about micro trenching alongside deployments by Verizon (VZ) and Telia Sonera -- two Tier 1 customers that I'm sure Clearfield would love to start penetrating. This isn't the first time Clearfield's solutions have been discussed in Fierce Telecom's articles about Tier 1 providers. In an article published on March 26, 2013 in which Fierce Telecom recommended Verizon restart its FIOS program, Clearfield's new modular platforms are mentioned. This is likely a carryover mention from a quote by CEO Cheri Beranek in a March 19, 2013 piece about Clearfield where Beranek claims Clearfield's modular solutions would absolutely work in Verizon's large network builds. In addition, Fierce Telecom tapped Beranek for industry insights in an article last August that focused on Google (GOOG) fiber builds. It will be interesting to see if these opportunistic placements help Clearfield break into these accounts or if Fierce Telecom has sniffed out that these providers are already trialing or using Clearfield's solutions. Time will tell.
Unfortunately Clearfield still does not have any analysts covering the company so investors need to find other ways to ferret out clues regarding the company's progress on their own. While Clearfield has been shy on releasing customer wins through standard press releases, it has been dropping clues via social media. Clearfield is still active on Facebook (FB) regarding customer (or potential customer) visits with their demonstration trailers. Johnny Hill, Clearfield's COO, has revealed two trips to Finland in 2013 via Twitter which could tie into the TeliaSonera link mentioned above. Blogs on the company website have also shared interesting tidbits. There is one blog post about "elephant hunting" that I recommend all Clearfield investors look at. Following the trail of bread crumbs, it gives investors an opportunity to get in before Wall Street finally wakes up.
I foresee Clearfield continuing to have strong growth for the rest of 2013 and the foreseeable future. As it enters its seasonal strong period, it is primed for further growth. As mentioned in its earnings report and SEC filings, it (a) has expanded manufacturing space and capabilities, (b) is in the process of getting additional telecom certifications, which are likely to get it deeper into Century Tel (CTL) and other Tier 2 accounts, and (c) is having success with its fiber to the tower initiative. Insider buying continues to be very strong with Director Charles N. Hayssen picking up over 37,000 shares in Q1 2013 and over 26000 shares in Q4 2012. Chairman Ron Roth, a frequent buyer, added 20,000 shares in Q4 2012, all of which adds to a very bullish scenario.