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David Shirk
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A Network Engineer at one of the worlds largest ISPs. Spent two years as a licensed broker from 2003-2005 at Montauk Financial, and then at L.H.Ross. Had to leave position due to getting deployed. When I returned from overseas, I decided to enter a bit more of an honest business.
  • ANAD: Proving Turnarounds Are Possible 0 comments
    Aug 9, 2013 5:49 PM | about stocks: ANAD
    When you have a company like ANAD (Anadigics), it is very easy to fall into the trap of ignoring the successes of a company with a bad track record. Once bad always bad being the mantra of the doubters. So the company recognizes the reasons it failed in the past (like relying on legacy hardware as a prime source of income), and comes back with a vengeance to produce cutting edge technology in their sector at a reasonable price. It restructures its management to aid in meeting these needs. It starts reaching out to high end companies that have a great benefit from its product, and gets their business. Now when a stock is smashed to a near all time low, and news like this develops, it is music to my ears. Is it a safe long term play for someone looking for capital security? No. It is however a growth stock with very high potential. Yet to many people, companies that have failed in the past are always failures and do not deserve their time of day. I wonder if anyone remembers the AMD heyday when they reigned and Intel only existed in low end Gateway systems and the like. Yet after AMD fell into the trap mentioned earlier, it is now looked at as yet another failure story. What poor memories investors seem to have. So here we have ANAD, a comeback story. Surging back into the higher echelons of wireless technology, doccsis 3.1 for cable, and a myriad of other high end receivers, ANAD has proved that when it comes to delivering a great product, they still got it. 'But the competitors offer the same thing and have more resources' - another mantra of those who don't bother to look at who is buying the new product line, or even what the new line entails. ANAD has no problem delivering a good product - just ask Samsung or Huawei. As to the resources end, it is the same issue. A company does not simply just start making higher end products - it spends resources in R&D, manufacturing, and sales. Instead of seeing the smaller amount of resources as a good thing due to the higher profit return, the doubters focus on the smaller resources being a sign of weakness against competitors. Very poor reasoning when you think about it. Finally, the Quarterly earnings come out, and they beat their expectations with solid reasoning given. Once again the doubters pop up with the same played out arguments 'but the competitors…but the resources…. They must be cooking their books'. Somehow someway, the high end players on the street take that side - as always with the exact same wording. In addition, they use information they already knew long before the disparaging comments, and ignore the progress made. Now yes, ANAD has obstacles to overcome - that is a given and one should be aware that it is not out of the water yet financially. Yet ignoring the progress made in shrugging off these past issues is ok for an investor who never looks any deeper than the headline, but it is irresponsible for the usual suspects to continue their games on such matters. I think from here on in I am going to wait to buy stock until all of the 'smart money' and 'must reads for the smart investor' gets their nonsense out of the way. I am sick of them finding stocks like this, smashing the price down, and then buying right before it spikes back up to where it should have been. The 'smart money', and 'must reads' have spoken their piece, and it's about time ANAD finally gets some much deserved appreciation. If it even comes close to maintaining its recent successes and follows its current guidance, than it will do very well indeed.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ANAD over the next 72 hours.

    Themes: Technology, Wi-Fi, DOCCSIS 3.1 Stocks: ANAD
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