Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>Ubiquiti (UI) reported fiscal second quarter (December) results affirming our expectations of the enterprise segment being the source of growth</li>
<li>Ubiquiti has introduced several new products lines over the past two years, which we believe are becoming an important part of the revenue story</li>
<li>The product mix and reduced shipping costs resulted in Ubiquiti reporting gross margin of 40 percent. This is the first time in four quarters gross margin reached 40 percent</li>
</ul>


Ubiquiti (UI) reported fiscal second quarter (December) results affirming our expectations of the enterprise segment being the source of growth
Ubiquiti has introduced several new products lines over the past two years, which we believe are becoming an important part of the revenue story
The product mix and reduced shipping costs resulted in Ubiquiti reporting gross margin of 40 percent. This is the first time in four quarters gross margin reached 40 percent


<ul>
<li>The enterprise segment has fueled revenue growth at Ubiquiti (UI) and it should remain the same in the fiscal second quarter</li>
<li>Ubiquiti has expanded its product offering for enterprise customers where it includes a complete solution down to the EV charging station</li>
<li>We have made several adjustments to our earnings model. We continue to assume gross margin rising sequentially due to lower costs</li>
</ul>


The enterprise segment has fueled revenue growth at Ubiquiti (UI) and it should remain the same in the fiscal second quarter
Ubiquiti has expanded its product offering for enterprise customers where it includes a complete solution down to the EV charging station
We have made several adjustments to our earnings model. We continue to assume gross margin rising sequentially due to lower costs


<ul>
<li>UI continued to report growth in its enterprise segment with total revenue rising to a new record. </li>
<li>Ubiquiti has been operating through a difficult supply chain environment where particular chipsets have been nearly impossible to purchase beyond allocation from the producer.</li>
<li>Ubiquiti has expanded its enterprise product portfolio to include more options where Ubiquiti is generating recurring revenue</li>
</ul>


UI continued to report growth in its enterprise segment with total revenue rising to a new record. 
Ubiquiti has been operating through a difficult supply chain environment where particular chipsets have been nearly impossible to purchase beyond allocation from the producer.
Ubiquiti has expanded its enterprise product portfolio to include more options where Ubiquiti is generating recurring revenue


<ul>
<li>Ubiquiti showcased a rebound in its business in the June 2022 quarter with revenue rising by nearly 24 percent from the March 2022 quarter</li>
<li>Ubiquiti reported fiscal fourth quarter revenue of $443.1 million compared to our estimate of $387.0 million</li>
<li>The increase in revenue during the June quarter suggests demand remains healthy enough to put Ubiquiti back on pace for potentially exceeding $500 million in revenue in a single quarter</li>
</ul>


Ubiquiti showcased a rebound in its business in the June 2022 quarter with revenue rising by nearly 24 percent from the March 2022 quarter
Ubiquiti reported fiscal fourth quarter revenue of $443.1 million compared to our estimate of $387.0 million
The increase in revenue during the June quarter suggests demand remains healthy enough to put Ubiquiti back on pace for potentially exceeding $500 million in revenue in a single quarter


Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>Sales declines, margin compression, cuts in SG&amp;A and cuts in guidance and estimates feature in our Declining Businesses model. </li>
<li>Declining business shorts tend to be lower beta, have longer time horizons, and tend to produce steadier (although slower) short returns.</li>
<li>Today we are flagging PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti .</li>
</ul>


Sales declines, margin compression, cuts in SG&amp;A and cuts in guidance and estimates feature in our Declining Businesses model. 
Declining business shorts tend to be lower beta, have longer time horizons, and tend to produce steadier (although slower) short returns.
Today we are flagging PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti .


Declining Business Short Candidates: PRA Grp, Herbalife, DISH, DXC Tech, Corsair Gaming, Ubiquiti

United States

Juniper Networks, Inc. provides Internet infrastructure solutions for Internet service providers and other telecommunications service providers.  The Company offers network infrastructure solutions that includes IP routing, Ethernet switching, security and application acceleration solutions.

F5 Networks, Inc. provides integrated Internet traffic management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications.  The Company's software-based solutions manage, control and optimize Internet traffic and content.  F5's solutions automatically deliver Internet content for service providers and e-businesses.

Ciena Corporation develops and markets communications network platforms and software, and offers professional services.  The Company's broadband access, data and optical networking platforms, software tools, and global network services support worldwide telecom and cable/MSO services providers, and enterprise and government networks.

EchoStar Corporation manufactures broadcast satellite receivers and antennas, and offers commercial satellite services.

InterDigital, Inc. develops technology for advanced digital wireless telecommunications applications.  The Company offers both time division multiple access and wide band code division multiple access proprietary and standards compliant digital wireless technology to customers, licensees, and companies.

Lumentum Holdings Inc. operates as a holding company. The Company, through its subsidiaries, supplies optical and photonic products. Lumentum Holdings serves data communications and telecommunications, networking, and life-sciences markets worldwide.

ViaSat, Inc. provides advanced broadband digital satellite communications and other wireless networking and signal processing equipment and services.  The Company's defense products include satellite communications products consisting of modems, terminals, and network control systems, advanced multifunction information distribution systems, and simulation test equipment.

Calix, Inc. provides communications access systems and software that enable communications service providers, or CSPs, to connect to their residential and business subscribers. The Company's products encompass its multiservice, multiprotocol access platform and its Ethernet service access platforms.

Viavi Solutions Inc. provides network and service enabling solutions and optical products. The Company offers installation, commissioning, scripting, custom analytics, integration, business intelligence consulting, operational assistance, field and lab testing, technical training, maintenance, and support services. Viavi Solutions serves customers worldwide.

Extreme Networks, Inc. provides switching solutions for local area networks (LAN).  The Company uses its custom ASICs and a common hardware, software, and management architecture to offer customers LAN solutions.

BYD Electronic International Co., Ltd. researches, develops, manufactures handset components such as handset casings and handset keypads and modules for handset manufacturers.  The Company also provides assembly services comprising assembly service and PCB assembly service to global handset manufacturers.

Accton Technology Corporation researches, develops, manufactures, and markets computer network system products such as adapters, hubs, switches, routers, and bridges. The Company also manufactures network computers and network peripheral equipment.

ZTE Corporation develops and markets switches, access servers, videoconferencing systems, mobile communication systems, data communication devices, and optical communication devices.  The Company also offers networking solutions for setup, refurbishment and optimization of networks.

Suzhou TFC Optical Communication Co., Ltd. researches, develops, and distributes fiber optic components.

Yealink Network Technology Corporation Limited operates as a communication equipment manufacturer. The Company provides telephones, unified communication terminals, video conferencing systems, conference phones, and other accessories. Yealink Network Technology serves customers worldwide.

Yealink Network Technology Cor (300628 CH)

Hengtong Optic-electric Co., Ltd. manufactures and distributes optical fiber and optical cables.

ITI Limited manufactures telecommunications products, including electronic switching equipment, telephones and related devices, digital radio, open wire bags, optical fiber equipment and digital exchanges.   The Group's customers include defense, railways and oil companies.

Guangzhou Haige Communications Group Inc Co develops and provides communication products and services.  The Company's products and services include digital communication system, internet communication system, and global positioning system navigation receiver.

Guangzhou Haige Cmncts Grp Inc Co (002465 CH)

China Zhenhua (Group) Science & Technology Co., Ltd. designs, manufactures, and markets electronic components, telecommunication equipment, and electric machines. The Company produces capacitors, integrated circuits, electric resistors, wireless phones, visual phones, and other products. China Zhenhua (Group) Science & Technology also invests in real estate businesses.

China Zhenhua (Group) Science & Tech (000733 CH)

Wistron NeWeb Corporation manufactures wireless communication systems.  The Company's products include satellite communication, wireless networking, embedded antenna, and mobile handset products.

Ubiquiti Inc. provides wireless networking products and solutions. The Company offers radios, antennas, and management tools that have been designed to deliver carrier class performance for wireless networking and other applications in the unlicensed radio frequency. Ubiquiti operates in the State of New York.

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Declining business shorts pursue profit by following negative business momentum. Today we are flagging PRA Grp, Herbalife, DISH, DXC Tech,...

Eric Fernandez, CFA

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