UBNT - A Must Read Article

Hi folks,

For those who don’t visit the UBNT RB board but are interested in a credible and comprehensive analysis on the Company, I highly recommend you reference the SA article as originally referenced by mview on the RB board. The comments below the article are also quite insightful and helpful

http://seekingalpha.com/article/2907406-ubiquiti-networks-a-…

I don’t expect to add to my position, but I have not sold any shares during this downturn and intend to hold long-term to watch Pera execute his vision. Opinions welcome, and best to all.

–Vic

5 Likes

I do not like to be negative. But i have been when it comes to communication companies such as Ruckus, INFN, and even UBNT.

I like to look for opportunity, but I am in the telecom business, and i see the UBNT solution as another form of a WIMAX play which in theory makes a lot of sense, but in the end never made it.

This is commodity networking business which has high standards in the service provider space which is why i think UBNT is showing declining business in that space. Their easy to use technology does not meet the requirements regarding controlling quality.

In the enterprise space it is Cisco that rules the world and those relationships and marketing dollars are in my opinion too hard (i.e. too risky for me as an investor) to break through.

UBNT is in a rough spot I think. They may be successful, but too risky for me. Even at this valuation.

6 Likes

I do not like to be negative. But i have been when it comes to communication companies such as Ruckus, INFN, and even UBNT.

You have been negative on INFN from the single digits and even as recently as last month in the low 13s. You said that you were worried for the INFN shareholders on the INFN board. You could not have been more wrong. They hit 18 last week.

I have a feeling that UBNT will do really well. Not sure about RKUS.

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Double bagel

No need to sound so irritable. I am just sharing my opinion. That is all. If you don’t like to read about my views just skip my post.

Was i wrong regarding price…that depends on when you bought in. If someone bought in at the MF recommendation date they have been underperforming the S&P by 80+%. If you have bought more recently you are laughing to the bank. Congrats if you are one of them.

I almost bought in at the singe digits. I ended up not doing that and took a bet with Alcatel-Lucent instead when they were in the $1-$1.50 range. That was a big bet for me personally because years and years ago i lost my pants on Lucent Technologies and after that ALU. Figured if I am going to make a bet i might as well do it with a company that has been in the business for decades and decades that service providers cannot afford to lose. That turned out well, but that was a timing play as well. I still think ALU is undervalued, especially compared to their peers, but i have mostly cashed in.

But that does not matter. The views on INFN I expressed have been mostly around whether INFN will be able to compete in the longer term and if they are going to be big and strong enough to survive as a optical specialist in a commodity business battling with bigger boys that have integrated multi technology portfolios and deeper customer relationships. My views are not about price behavior over the past or future 12 months.

The same concerns i have with UBNT.

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I have got in at various price points on INFN and each one has been profitable. I also suggested buying Feb/Mar calls on INFN at 13.50 before the earnings call on all the INFN boards. That turned out to be very profitable :slight_smile:

Good for you with your recent ALU win. I missed buying it at the lows.

My point is that you didn’t express concerns with UBNT when it was at 50+. You are expressing concerns when it is trading at $28 near 52-week lows and it is expected to earn $2+ next year. It is not overvalued at all. (say compared to Zillow, Amazon, any of the 3D printing stocks etc.)

The internet is not going away and bandwidth needs are constantly increasing. The way I see it there will be constant need for INFN’s and UBNT’s products.

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In the enterprise space it is Cisco that rules the world and those relationships and marketing dollars are in my opinion too hard (i.e. too risky for me as an investor) to break through.

While I also think UBNT is more risky then it looks, Cisco is really not a risk factor I worry about. Pera has discussed this multiple times in the last couple of conference calls, check those out or any of the conference call notes that people have been posting.

Basically Cisco goes after the big multi million dollar contracts while UBNT goes after the many smaller ones. UBNT offers a much cheaper solution, and Pera plans to eventually start moving up market.

2 Likes