Wednesday, December 27, 2006

Calls of Note Part 2

- ThinkEquity notes that Germany is completing the auctioning of approximately four 3.5 GHz licenses at what appears to be extremely low prices. Firm believes this should cause a giant
spending boom for WiMax in Germany starting some time in 2007. Of course, Alvarion (NASDAQ:ALVR) will be one of the leading contenders for these four new accounts, with the usual list of competitive suspects.

Many years have passed since Margaret Thatcher and Ronald Reagan delivered excitement in terms of attempting to roll back the long claws of government ownership. Of course, the U.S. sold 1900 MHz spectrum in the mid-1990s and only a few months ago held some further auctions for 1700 and 2100 MHz. But, generally, these moments of privatization have been few and far between. At least outside of the former Eastern Bloc and South-East Asia, capitalism and private property have generally not been on the march for the last 15+ years.

So it is with great joy that they celebrate this year's Christmas gift from Germany: Privatizing 3.5 GHz spectrum for WiMax. Firm believes the bulk of the capital spending will start to kick in around the middle of 2007 at best. Competition for these contracts should be fierce.

At this point, they have no reliable view of how Alvarion's 4Q is tracking. Firm maintains 2006, 2007 and 2008 revenue estimates of $207m, $259m and $371m. For the same time periods, their untaxed EPS estimates remain ($0.01), $0.19 and $0.82. They maintain their 12-month price target of $10. This implies a target market cap of $630m, of which $109m is in cash

Notablecalls: I suspect this one is for the investor types rather than traders. Somewhat actionable?

No comments: