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Matthew Dow

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  • 2 Technology Stocks To Buy In September [View article]
    nice article, and thanks for linking to mine on ASML!
    Sep 6 02:44 PM | Likes Like |Link to Comment
  • UFP Technologies - Molding Long-Term Growth [View article]
    Thanks for the article, maybe you have seen mine on UFPT published a few days ago. I think we come to a similar conclusion on the company, albeit with some different insights. I didn't discuss management too much in mine, but I was impressed with their longevity at the company, experience in the industry, track record, and as you said nobody appears about to retire yet either based on ages in the 50s....
    Sep 6 03:57 AM | 1 Like Like |Link to Comment
  • Ubiquiti Networks: Lock-up Expires, Providing A Short-Term Alpha Opportunity [View article]
    Thanks metallic blue. As an additional note to what I wrote in the article, it has been pointed out to me that under the SEC 144 rule, Summit could sell closer to 4m shares in this period after the lock up expired. This based on 4x the average weekly trading volume in past month. We'll see exactly when the form 4 comes out (likely today or monday at latest), but I believe it was in the neighborhood of 2.5m shares. Also some other insiders are selling, albeit smaller amounts, 1 director and 1 officer have sold as already officially reported. For insiders this is not surprising, some profit taking can be expected after such a huge run up. A sign of confidence is when Pera (65% owner of company) does not sell anything significant, which I don't think has happened, as the indications I have is that he believes fully in the long term story here and is in for the long haul.
    Sep 6 02:49 AM | 1 Like Like |Link to Comment
  • Ubiquiti Networks: This Bull Still Has Plenty Of Room To Run [View article]
    Hi Robert

    I definitely didn't expect this quick a ride! I have not sold now, but likely I will take some profits off the table near term, or perhaps put in a stop loss on part of my holding to ensure I lock in above $35. Indeed I feel the company is now fairly valued, as I indicated in the article. I'm not a technical guy at all, nor do I aspire to be, but I'm pretty sure it is overbought on the major indicators. There has been several pieces of good news in the last 2 weeks, which keeps fueling the short term rally. Once the news quiets down, I suspect it will drift down a bit....
    Aug 28 04:52 PM | Likes Like |Link to Comment
  • Aruba Networks: Squeezed By The Competition, This One Is Not Worth The Risk [View article]
    I have written 69 articles on SA, you can go back and look at some if you care to... in fact I was writing this over several days, the timing around earnings was coincidental, my conclusion was the same either way.... although the recent quarterly results supported the conclusions i was making in my opinion. I also hold no position in ARUN long or short.

    Anyways, thanks for your detailed critiques, I enjoy reading opposing opinions, good luck with your investments.
    Aug 27 02:42 PM | Likes Like |Link to Comment
  • Ubiquiti higher after announcing Wi-Fi hardware milestone [View news story]
    Thanks Metallic Blue for the nice comment!
    Aug 27 04:50 AM | Likes Like |Link to Comment
  • Aruba Networks: Squeezed By The Competition, This One Is Not Worth The Risk [View article]
    Thanks for your first comment on SA and your critique. I agree with your point that Aruba has strong technology, and I agree that the growth of the industry could indeed propel many of these companies higher. That and the possibility of a takeover is why I would not short Aruba, as I mentioned in my conclusion.
    However your premise that growth/profitability metrics are not important is I believe a dangerous one.... this can be true in the short term, but in the longer term it will win out. So for me, Aruba is currently too speculative, in that there are obviously a lot of competitive pressures surrounding it (more in my opinion than a few years ago), and there is a lot of pressure on them now to really return to growth in the short term.

    Also you are right with companies like Tesla, or look at Amazon.... there will always be fascinating tech stories which in the short term do not trade on fundamentals. Some of these will be big winners longer term, but many of them will not. When I look for a margin of safety in investing, I try to weed out these situations where in my opinion there are too many factors to be able to make a clear cut judgement on the future prospects. So I think we have a difference in philosophy on this point.
    Aug 27 02:27 AM | Likes Like |Link to Comment
  • Ubiquiti higher after announcing Wi-Fi hardware milestone [View news story]
    Yes, analysts are still adjusting their targets and estimates higher, as they get fully in tune with the company's growth cycle.
    I've followed the story all year, see my latest article here:
    http://seekingalpha.co...
    Aug 26 03:24 PM | Likes Like |Link to Comment
  • Aruba Networks: Squeezed By The Competition, This One Is Not Worth The Risk [View article]
    No, I didn't say anything about gross margins. Indeed, at a steady rate near 70% for several years, they are not weak. What I spoke about in the article was the operating margins, as SG&A + R&D expenses are well over 50% of revenues. So their operating profit/net margins have remained consistently low, and they are not expected to get better anytime soon as they are spending even more on sales/marketing in order to try and fight off the competitive assault they've been receiving from Cisco. So what this means is that they can only grow profits and earnings (the ultimate long term driver of stock price) when they grow the top line significantly, 20%+ per annum. As recent results were still low single digits, they have a lot to prove in order to show they can get back to long term growth. Otherwise the current market price is not justified.
    On the technology side, I didn't focus on it in detail in this article, but I did mention their MOVE architecture and clearly they do have strengths in terms of product differentiation and offerings for BYOD use cases. But I think as the market matures further there will be many many customers on the lower ends of the market, e.g. emerging countries & price sensitive industries like education which will opt for cheaper alternatives as they will find the extra bells & whistles are not needed. So as Aruba faces stiff competition from much larger and better capitalized competitors such as Cisco, and they will have trouble capturing the lower part of the market due to their cost structure and competition from upstart companies such as the example UBNT I gave, I think in the longer term they are in danger of getting squeezed out of the market.

    Btw Thanks for your first comment on SA, and I'd enjoy reading an opposing viewpoint in detail from you via an article.
    Aug 26 03:24 AM | Likes Like |Link to Comment
  • Aruba Networks: Squeezed By The Competition, This One Is Not Worth The Risk [View article]
    Thanks for the comment. I agree that overtime, this technology becomes more of a commodity in the sense that only the very top end enterprise users will be willing to pay luxury pricing for the extra features it brings. UBNT has a lot of room to run, both in emerging markets and gaining further traction in the enterprise space. They still cannot provide the level of support that Cisco can, and will likely need to beef up their operating structure a bit as they grow. But for sure stilll plenty of opportunities in their current model. Aruba I feel is already very heavy in terms of operating expenses, and it will be harder for them to trim this to be able to compete more in the price sensitive areas of the market.
    Aug 26 03:17 AM | Likes Like |Link to Comment
  • Nasdaq down but futures open for business [View news story]
    It's windows.... when in doubt, reboot! :)
    Aug 22 02:45 PM | 1 Like Like |Link to Comment
  • Ubiquiti Networks: Significant Upside Potential In 2013 [View article]
    published a few days ago:
    http://seekingalpha.co...
    Aug 18 02:23 AM | Likes Like |Link to Comment
  • Ubiquiti Networks: This Bull Still Has Plenty Of Room To Run [View article]
    I don't think its overvalued at all compared to peers - there are several networking companies directly competiting with UBNT that have far superior valuations, despite much weaker operating metrics and weaker near term growth. Although I suspect they are overvalued, industry prospects are very bright so my assessment is that they are overvalued and UBNT Is undervalued.... hence my valuation in the mid $30s would put UBNT in between its current valuation and competitors.
    You are correct there is a long term risk of changing technology, which is true in almost all facets of the tech industry. Another reason i use a 12% discount rate when valuing future cash flows, which still provides a valuation in the mid $30s. I think the disruptive pricing of UBNT in almost all industries they are gives them a lot room - networking in general is becoming more commoditized over time in my opinion, in which case you want to be in on the lower cost producers rather than the Ciscos. UBNT is cheaper by a factor of 4 or 5, it's not even close, so I really like their prospects to continue gaining share and having outsized growth in the next few years.
    Aug 16 05:30 AM | 1 Like Like |Link to Comment
  • Ubiquiti Networks: This Bull Still Has Plenty Of Room To Run [View article]
    Thanks for the nice words
    Aug 15 02:30 AM | 1 Like Like |Link to Comment
  • Ubiquiti Networks: This Bull Still Has Plenty Of Room To Run [View article]
    UBNT uses distributors for all of their major product lines, so usually it is not selling directly to end users. So sometimes the lead time will vary from distributor to distributor. The company has spent a lot of time in the recent year on improving internal processes, controls and related in its supply chain. I believe they will also look for further vertical integration to continue to improve this over time, which is the indication I've received from management. Also as they release new products, such as airVision 2 I know they do initial stocking of the distribution channel. Anyways I think its an important insight and trend to watch carefully how well they manage this as they continue to grow. So far it's not hurting the bottom line.
    Aug 15 02:29 AM | 1 Like Like |Link to Comment
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