As if the market wasn't bad enough on Thursday, along came Merriman, Curhan, Ford & Co., and downgrades Alvarion (NASDAQ:ALVR) saying that they don’t believe that Alvarion can compete with the big boys. They said that telecom giants like Motorola (MOT), Alcatel-Lucent (NYSE:ALU), and Nortel (NT) have the global mass needed to squeeze out Alvarion. These global giants definitely have lots of girth, but for investors trying to make some money, it’s clearly time for them to trim the fat. Over the last two years the “BIG 3″ have lost investors, about 20% in both MOT and ALU, and 50% in NT, while Alvarion’s had a stellar 60% return. Just like a good defense in football; it’s better to be fast and agile, then to be big and slow.
What they are missing is that Alvarion’s strength comes in emerging markets. Markets that the big-boys just aren’t ready to play in. The company finished the third quarter with 200 commercial deployments, which is up from about 170 at the end of Q2. It sure sounds to me that it is competing just fine. Giddy up!
Commenting on Alvarion's results, CEO Tzvika Friedman said,
We are pleased to report another quarter of record revenues and we are on track to achieve our 25-30% growth objective for 2007. BreezeMAX revenue was more than double the level of a year ago. WiMAX shipments remained at a high level and we ended the quarter with over 200 commercial deployments, up from about 170 at the end of Q2. Many of these deployments are still in the early stages, and represent significant opportunities for future expansion.
As a betting man, I wouldn’t be surprised if one of the “BIG 3″ actually buys Alvarion, if Cisco (NASDAQ:CSCO) ends up passing on them. After speaking with my collegue Zack ”Facebook” Miller, he agrees that one of these guys may try, and make a play for Alvarion.
It sure looks like Alvarion's business is very solid. But, this just might be because I like underdogs, but at around $11.40, it looks like a steal.
Disclosure: The author has a position in ALVR, but has no other position in any other stocks mentioned, as of November 1, 2007.