Out Fox The $treet

Alvarion (ALVR) is the largest 'pure play' WIMAX equipment maker and should be a big beneficiary of the worldwide move to mobile internet. Early Tuesday, they announced 2 significant contract deals that the market has only modestly responded too by the close. ALVR signed deals with Safaricom in Kenya and Clearwire (CLWR) in Spain . Some people have probably heard of Clearwire (or maybe not), but not likely Safaricom. This highlights the typical problems ALVR faces. Customer name recognition isn't usually that high and explains why ALVR trades around an EV of .5 to Sales. They also have $130M in cash and only a $270M market valuation. The Safaricom deal was significant both financially and strategically. Financially the deal is $12M for the initial phase of a 36 month deal. So already its likely a $30-40M deal over 3 years. Strategically the deal places ALVR in alliance with Vodaphone since they are part of the Safaricom joint venture. It also place them with an aggressive ...

Alvarion (ALVR) continues to be one of the most disappointing stocks in our universe. ALVR is a mobile internet play for emerging markets. How doesn't it just soar based on that thesis? Even considering you need more then that, ALVR is a dominant player in the WIMAX market and continues to have huge potential in the emerging markets. Zacks has remained bullish on ALVR over the last month or so. ALVR is extremely cheap but issues remain with the future of WIMAX. Nothing really new in that camp. Regardless, we agree with Zacks and would recommend buying at these levels.

Back on August 11th, Jim Cramer promoted the Mad Money Mobile Internet Index . An index that tracks the upswing in mobile internet devices such as the iPhone from Apple (AAPL) and the Pre from Palm (PALM). Cramer thinks this is a multi-year move similar to PC revolution in the mid 90s and the internet revolution in the late '90s. On-the-go Web is a trend equal to the mass adoption of the PC, he said, and it will be with us for some time to come. So Cramer today created the Mad Money Mobile Internet Index to track what he expects will be a years-long growth cycle. The index includes 21 stocks that for the most part don't interest us because most of the networking equipment and semiconductor companies margins tend to get squeezed by the big players such as APPL. Its hard to over thing this play and why not just go with the big boy benefiting from the theme. Index list by sector: Smartphones Apple - AAPL Google - GOOG Research in Motion - RIMM Palm - PALM Telecom Equipment ADC Te...

This time they've one a deal in Italy. Aria owns a nationwide network so this is likely one of the $20M+ deals that ALVR management continuously discuss. ALVR continues to remain a very cheap stock especially now that they've announced 2 major contracts. Aria currently holds nationwide WiMAX licenses at the 3.5 GHz frequency bands in Italy. By using Alvarion’s Open WiMAX solution, Aria will be able to build a state of the art network with exceptional coverage to meet the growing demand for broadband services in the country. Analyst from CL King provides his view. While we agree the deal is likely worth more then $20M, we don't agree in how the analyst only comes to a target price of $5. Its easily worth $5 now with a target price more in the range of $10. The order is from Aria SPA, an Italian wireless Internet service provider. Financial details were not disclosed. However, Lawrence M. Harris, an analyst with CL King & Associates, said in a note to investors the valu...

As hinted at yesterday including on my instablog, Alvarion (ALVR) officially announced a deal that will exceed $100M over 5 years. Now the deal is with Open Range instead of Clearwire which is a company I've never heard of so I was skeptical at first. After reading up on them and understanding that a large part of the funds is coming from the Rural Broadband portion of the stimulus plan, I'm a lot more comfortable like the market that this is a solid deal. Not to mention that ALVR has a history of being conservative. Oddly I was planning on doing a writeup about the $7M Nigerian deal that they announced a few weeks back. That deal was important to me because of the growing importance of Africa and specifically Nigeria. It also had the potential to ba a $20M deal down the road. This deal though trumps that in a large way. It also gives ALVR some exposure to the US market which always seems what the stock market wants. Odd, considering that the emerging market story has been h...

Very interesting article at Economist.com about the huge transactions taking place in Farmland mainly surrounding Middle Eastern or China buyers of affordable, unproductive farmland in Africa. Most striking is the deal where Saudia Arabia is leasing land from Ethiopia and shipping the food back home. Some day this trend will likely reverse as Ethiopia catches onto the game and grows the food themselves and ships it to the Middle East for huge profits. Food is likely to be more scarce then oil/energy supplies in the future. Not to mention that the World Food Program provides Ethiopia with food that could just as easily get from the land they've just leased out. What about using that money for it instead as well? Hmm... All of these deals highlight the need for food in parts of the world and the available land in other parts. The investment increases in Sudan alone are enourmous. Stocks from farm equipment companies like Deere (DE), fertilizers like Potash (POT) and Mosiac (MOS), al...

Having watched the market fall apart the last 16 months, it's no surprise that a small cap tech stock like Anadigics (ANAD) has been hit hard. The amount of the fall might be surprising though considering they have an impressive balance sheet. So many professionals scream on CNBC all day that they want to invest in companies that don't need cash yet stocks like ANAD and another favorite of Stone Fox Capital, Alvarion (ALVR), have fallen to levels that equal cash. Basically the remaining company was valued as worthless. As survivors of the tech bust in 2000, you'd think investors would give these companies a greater benefit of the doubt. Much more willing to look beyond the current climate and realize that they will be survivors. Times may be bad, but with their balance sheet they'll clearly survive and maybe thrive when we come out of this as the competition might be greatly reduced with the weak competitors not surviving. Recessions aren't always bad if a company c...

Not a huge shock considering the bankruptcy filing by Nortel (NT) a while back. After hours last night Alvarion (ALVR) issued a PR detailing the break and the financail impact. It's disappointing because ALVR had hoped to use the scale of NT to allow them into bigger deals, but this cancellation doesn't end the dominance of ALVR in the Wimax market. Guess we'll find out more details from the breakup on the Q4 call. With ALVR trading near cash now, the stock is a huge buy. NT had hardly become a big part of the business and won't leave a huge wake when they leave. The joint strategic WiMAX agreement covers, among other things, the resale by Nortel of the Alvarion platform of WiMAX access products and Nortel’s contribution of resources and funding to accelerate Alvarion’s development of its portfolio of WiMAX base stations. Under the terms of the agreement, Nortel is obligated to pay Alvarion for certain research and development services beyond Q4; however, collection of...