I know that there are a few of us on the board that own, or have owned, Sierra Wireless. I’ve followed the supply constraint issue and seen the reaction to the soft Q3 guidance.
I bought a partial portion in June 2015, so I’m down 17% and counting. I’m considering adding a second partial portion (I will be keeping this a small/medium-small stock for me) during this dip with the expectation that SWIR will exceed Q3 guidance and have a strong Q4.
Am I alone in drinking the Kook-Aid on this one?
I’m considering adding a second partial portion (I will be keeping this a small/medium-small stock for me) during this dip with the expectation that SWIR will exceed Q3 guidance and have a strong Q4.
I own Sierra and am currently up about 10%. If I was considering another purchase I would do so after the company accomplished something rather than in the expectation of it. Just me.
Jeb
Long SWIR
SWIR Ticker Guide
See all my holdings here: http://my.fool.com/profile/TMFJebbo/info.aspx
I have a small position (1%) as well, and am currently up 51% since my initial purchase in November 2013. I have been thinking of adding to it, but I am not sure it is the best candidate out there right now for new funds.
I bought a partial portion in June 2015, so I’m down 17% and counting. I’m considering adding a second partial portion (I will be keeping this a small/medium-small stock for me) during this dip with the expectation that SWIR will exceed Q3 guidance and have a strong Q4.
Hi rh,
On what basis would you be adding? I’m really wondering. Here’s what they said:
Financial Guidance
Next quarter we expect revenue and gross margin percentage to be similar to this quarter, and operating expenses to increase slightly.
Revenue $157-$160 million
Earnings 23 to 27 cents
That’s really pretty terrible for a growth company if you think about it. Look, their last four quarters of revenue have gone
143
149
150
158
That’s up about 10% in 3 quarters, and if they hit the top of their range at 160, they’ll be up 11.9% year over year. And their earnings have stalled out too:
24
29
22
26…and if they hit the top of their range, they’d add
27…here on the bottom. Does that excite you? Is that the best you think you can find? And what is their ambition? It’s to keep growing 15% per year. They’ve stated it several times. Sure they may be underestimating, and may hit 18% instead. With a PE of 24, where are they going to go with that?
Sorry
Saul
Thanks Saul.
I was going on the idea of an exceeding Q3 a little more than they projected (like you said, 18% for Q3, but I was anticipating a much stronger Q4 (building on the supply constraint resolution and a slightly stronger than guidance Q3).
I missed the part of their 15% ambition. That changes the potential for me.
Jeb probably has it right… no reason for more investment until they prove something.
Thanks
I hold and am up on my original purchase and the top up entry point.
I believe that their current growth has been constrained my supply constraints and also the transition effect between businesses. Once through that and combined with acquisitions they should be well beyond 15% growth levels (which I thought were the near term organic intentions).
Of more concern to me is the question of whether we are in the wrong race, forget about backing the right horse.
There’s a major question mark over whether IoT will be cellular, Bluetooth, wifi, etc based.
Ant