Mark Gomes'  Instablog

Just an update for those of you who are involved in this one. We continue to view ALVR as a lottery ticket, which could go up several fold or lose most of its value (big risk; big reward). We're confident that management is doing all they can to ensure the latter, but many factors will come into play. We'll see how it plays out.

• Sold the majority of its older patents.

• Didn't sell patents for the next-gen compact WiMAX products for WiFi offload.

• 50-100 patents remain, including patent applications and Wavion patents.

• $8.5M has already been wired into ALVR's bank account. The rest will be sent upon approval from the Israeli Chief Scientist (which we believe has been "pre-approved" - it's just going through the official process).

• Deals slipped for a few reasons - Deal 1: Latin American site wasn't ready. Deal 2 was a partial shipment, which is awaiting financing for the remainder (which came in shortly after the quarter ended). Deal 3: African deal that fell victim to the signature process; expected to come in 2 weeks.

• Stimulus activity is still muted; Wifi offload is where ALVR is focused.

• ALVR won another large win in Asia Pacific; they are pushing hard to penetrate U.S. and Europe. Overall, the wifi biz is performing according to plan - this is their growth engine.

• Lots of cash expected to come in Q4 from patents, more asset sales, and closing shipped deals. Mgt acknowledges the need to lower the breakeven point further.

• To mitigate future losses on failed customers, ALVR checks financials and now obtains commercial-financing insurance on about 50% of its deals.

Disclosure: I am long ALVR.

It's official. In yesterday's Instablog, we discussed an Attunity (ATTU) announcement that leaked out into the media. That information proved to be accurate. Indeed, Attunity's data replication system for big data is being featured at Oracle (ORCL) OpenWorld this week. In addition, the company's new offering for Oracle's Exadata database appliance was announced this morning. CRN.com leaked that announcement yesterday and ranked it as the #1 "Hot Product" to see at the conference.

What we find interesting about this situation is that Oracle is playing host to ATTU despite ORCL's ownership of GoldenGate Software. That's relevant for two reasons:

1. GoldenGate was acquired for its ability to provide real-time capabilities for data integration, availability and migration. At the time (2009), this technology was already considered to be in high demand…and that's before Big Data took the world by storm. The proof was in the numbers -- GoldenGate had grown to $100 million in revenue at the time of the buyout. Clearly, ATTU is bringing some value-add to the table. ORCL not only welcomed ATTU's presence at OpenWorld, it is also a strategic partner.

2. Based on our research at Pipeline Data, ATTU is the strongest remaining independent vendor in the space, based on technology prowess and revenue. They appear destined to follow a similar path as GoldenGate. After posting just $10 million in 2010, ATTU grew 50% in 2011 to $15 million. The company is on track to grow even faster this year. Sales are now on a $25 million run rate -- total revenues increased 110% to $6.4 million in the June quarter, while net income jumped 185% to $0.5 Million.

Of course, we're still in the early innings. There is plenty of heavy lifting left to be done. Many risks come along with that. However, ATTU has its wagon hitched to one of the hottest areas of technology - Big Data. As such, it has a potentially long runway of growth ahead. It also has several ways to expand its current product portfolio and take fuller advantage of its extensive partner network. This will require continued execution on the sales front, along with M&A and R&D. If successful, we believe ATTU could eventually find itself on the receiving end of an acquisition, just as GoldenGate did.

Accordingly, ATTU remains a component of our Stocks to Triple Portfolio with a "Gold Mine" classification. See our last update for details.

Disclosure: I am long ATTU. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We have some color commentary on the positive ATTU buzz from yesterday. We'll be posting that later today.

We will also be analyzing the good and bad ALVR news and what it means for that investment.

Stay tuned...

________________________________________________

Did you get this news delivered in REAL-TIME for FREE?

If you have a Twitter.com account (free to register --
even Obama and Romney have one!) just text the words
FOLLOW BOSTONGEKKO to 40404.

________________________________________________

Disclosure: I am long ATTU, ALVR.