Comtech's Restructuring Is Risky And Only Makes Sense Under Very Optimistic Assumptions

Quipus Capital profile picture
Quipus Capital
1.31K Followers
(12min)

Summary

  • Comtech Telecommunications is a telecommunications equipment and infrastructure company involved in satellite equipment and emergency call networks.
  • The company has been mismanaged for years, with high CEO rotation, and a difficult leverage position.
  • This week the company announced the decision to sell one of its two segments, a default waiver, and problems to file its 10-K on time.
  • Analyzing different divestment scenarios, Comtech only seems a reasonable investment under very optimistic conditions. For that reason, it is not an opportunity.

Sun shining behind satellite dish in desert, Socorro, New Mexico, United States

Spaces Images

Comtech Telecommunications (NASDAQ:CMTL) is a telecommunications equipment and infrastructure company. The company operates in two segments: satellite and radio frequency equipment (mainly antennas, amplifiers, modems, and troposcatter equipment) and 911 network services (routing, localization processing, VoIP). None of these businesses is particularly well positioned or enjoys good

This article was written by

Quipus Capital profile picture
1.31K Followers
Long-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, and buying companies that we would like to hold independently of how the price moves in the future. Most QC calls will be holds, and that is by design. Only a very small fraction of companies should be a buy at any point in time. However, hold articles provide important information for future investors and a healthy dose of skepticism to a relatively bullish-biased market.Disclaimer: All of the author's articles are written on an "as is" basis and without warranty. They represent the author's opinion only and in no way constitute professional investment advice. It is the responsibility of the reader to conduct their due diligence and seek investment advice from a licensed professional before making any investment decisions. The author disclaims all liability for any actions taken based on the information contained in any articles published.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About CMTL Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on CMTL

Related Stocks

SymbolLast Price% Chg
CMTL
--