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.

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...