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Barath Balu  

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  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    To be honest, I was in the same boat as you, but I changed my mind after I began to understand the industry more. Competitors GM's are ~70%, but they offer better tech and customer service. UBNT offers mostly standard tech, and no formal customer support, so they serve a different set of customers entirely. They are already much cheaper than their high end competitors, and much better than their low end competitors, so they can probably avoid margin erosion.
    Feb 20, 2015. 05:17 PM | 1 Like Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    To be honest, I really don't know what they're doing to hedge. I'm just a college student, so I don't get calls with IR until summer internships!
    Feb 20, 2015. 11:52 AM | Likes Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    Hi Dave,

    I actually don't subscribe to Barron's, so I really only read articles that my professors or colleagues send me. In general, I'm not a huge fan because their analysis tends to be superficial. I read their bearish piece on UBNT from a couple months ago, and it was pretty poorly done. It really showed that they didn't understand UBNT's business model or the industry.

    One of their main points was that they expect SG&A and R&D to increase substantially because its currently too low compared to their competitors. That's it. They basically said, because Cisco spends this much, Ubiquiti should be too. This indicates that the author really did not bother to look beyond the 10k...
    Feb 20, 2015. 11:35 AM | 2 Likes Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    Hi Davis,

    I'm glad you liked my article! UBNT will not be able to generate any recurring revenue with its current product line. In fact, they explicitly avoid adding in a SaaS component to their hardware because it would put off many of their customers. Instead they offer software that operates on the customer network for no cost. Personally, I don't think they really need to yet. They get enough new activations, and replacements/product refresh will continue to drive revenue. New product launches will also help in the future.
    Feb 20, 2015. 11:17 AM | Likes Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    No that's just my own estimate that I modeled using data from ITU's World Telecom Statistics. But the idea behind this thesis is that while the bandwidth and reliability of wireless has always trailed that of wireline, but has gotten to the point that its good enough for many. If you've ever read any of Clayton Christensen's works, this is a classic candidate to be a disruptor.
    Feb 19, 2015. 06:46 PM | 1 Like Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    Actually, Bloon uses Ubiquiti's equipment. The baloon itself uses a Rocket M2 and the ground receiver uses a Rocket M5. In any case, I think the idea has potential in the very long run, but right now its more of a proof of concept I think. It's not feasible as a mainstream solution yet.
    Feb 19, 2015. 01:25 PM | Likes Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    Thank you for the kind words!
    Feb 17, 2015. 02:46 PM | Likes Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    I'm not very concerned about the P/B ratio in this case. When a company has a high P/B, it can mean one of two things - the company is overvalued, or the market expects them to earn a very high return on equity. I'd say its the later in this case.

    I can't comment much on the chart pattern. I'm more of a long term value investor, so I don't have much knowledge of technicals.
    Feb 17, 2015. 02:46 PM | 1 Like Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    The strong dollar will be a headwind, but I maintain that the volume growth in emerging markets should still allow them to overcome it in the long run. The strong dollar is one of the reasons I modeled a sizable drop in revenue for 2015 though.
    Feb 14, 2015. 12:23 AM | Likes Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    Hi Chris,

    Both are very good questions.

    1. I do believe their margins are sustainable, and I do not make that assumption lightly. Normally, tech companies would see their gross margins erode as the technology they charged a premium for becomes obsolete. They may also see their operating margins erode further as they become more R&D intensive to remain competitive. However, Ubiquiti does not differentiate itself using technology - instead they use a unique business model and market segmentation. Plus, their products are already radically cheaper than the competition. Now, I'm only saying margin erosion is unlikely, not impossible, which is why I account for those scenarios in my Monte Carlo simulation.

    2. The tax rate isn't low because of any NOL. It's low because UBNT generates most of its revenue overseas, and then spends it overseas. Their manufacturing plants and a good bit of their R&D is overseas. Their main R&D team and management are the only things in the US.
    Feb 14, 2015. 12:21 AM | 1 Like Like |Link to Comment
  • Buy Ubiquiti Networks - Offers 50% Upside With Highly Limited Downside [View article]
    Hi Mingran,

    I'm glad you liked my article!

    1. That's unit volume. You're right in saying that their revenue share would be much lower. Thanks for asking this question. I'm going to submit an edit to specify this, because a 22.5% share of revenue would be an absurdly optimistic expectation!

    2. These numbers came from data that IDC reported and published to Bloomberg. I can't exactly link to it, but if you have a Bloomberg Professional subscription you can look it up yourself.
    Feb 14, 2015. 12:01 AM | Likes Like |Link to Comment
  • SodaStream International Is An Attractive Buy At These Levels [View article]
    Hi Seth. Thank you for your comment.

    I actually could not find what the exact margin on the soda makers was. Can you share the source for your 25% to 30% figure? All I managed to find was a line that they were sold nearly at cost in the 2012 10k filing.

    I have to disagree with your comment on Kitchen Aid. The brand is certainly more popular and has a greater following. http://bit.ly/1ck9kTa

    The regular cola may be cheaper than coke or pepsi under certain circumstances. I chose to compare unit costs to 2 liter bottles. The difference is about $.50/liter vs $.75/liter. Then when you add in the cost of CO2 ($.25/liter) the cost becomes the same. Considering you have a $70 minimum fixed cost, it does end up being more expensive. When you sue naturally flavored cola as the basis for this comparison, which is about $2/liter, its clearly more expensive.
    Feb 25, 2014. 12:55 PM | Likes Like |Link to Comment
  • Intel Investors Should Not Care About The 5s' Benchmarks [View article]
    I would say that the Galaxy Tab 10.1 was a notable design win
    Nov 9, 2013. 10:54 AM | Likes Like |Link to Comment
  • Intel Investors Should Not Care About The 5s' Benchmarks [View article]
    Actually cube, I was replying to familymisc's earlier comment, which quoted you.
    Nov 9, 2013. 12:35 AM | Likes Like |Link to Comment
  • Intel Investors Should Not Care About The 5s' Benchmarks [View article]
    I would agree with you to an extent. Bay Trail way by no means a "huge achievement." Anyone that expected it to singlehandedly make Intel a major player in the mobile space had lofty expectations indeed.

    However, I would say you're a bit too harsh in your analysis. I see Bay Trail as an impressive step in the right direction from a company with next to no history and experience in mobile. They have a long way to go in terms of LTE radio integration, but they made a power efficient chip that matches, if not beats, its competition in performance.
    Nov 8, 2013. 01:29 AM | Likes Like |Link to Comment
COMMENTS STATS
54 Comments
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