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

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Ubiquiti (UI) ended its 2021 fiscal year with results continuing to pace ahead of expectations as demand for its products remains brisk. Revenue rose sequentially with both service provider and enterprise segments showing growth from the March quarter.</li></ul> <ul type="disc"><li>There has been a steady demand environment for Ubiquiti. The June quarter was rather important, in our opinion, as it was the first time after a blog report negatively blemished a cyber security incident. Demand did not erode like investors had been pricing into the share price.</li></ul> <ul type="disc"><li>Ubiquiti reported revenue of $477.9 million for the June quarter compared to our estimate of $464.9 million. We had originally forecast Ubiquiti to report revenue of $483.6 million in revenue until it became obvious there were too many component shortages in the quarter for Ubiquiti to meet such a figure. The component shortages are expected to persist into calendar 2022, which could curtail revenue growth from its true potential.</li></ul> <ul type="disc"><li>Ubiquiti’s stock is trading at a similar PE multiple to beginning of this year, but the business now has more cash and less debt than the start of the calendar year and a broader product portfolio.</li></ul>


Ubiquiti (UI) ended its 2021 fiscal year with results continuing to pace ahead of expectations as demand for its products remains brisk. Revenue rose sequentially with both service provider and enterprise segments showing growth from the March quarter. There has been a steady demand environment for Ubiquiti. The June quarter was rather important, in our opinion, as it was the first time after a blog report negatively blemished a cyber security incident. Demand did not erode like investors had been pricing into the share price. Ubiquiti reported revenue of $477.9 million for the June quarter compared to our estimate of $464.9 million. We had originally forecast Ubiquiti to report revenue of $483.6 million in revenue until it became obvious there were too many component shortages in the quarter for Ubiquiti to meet such a figure. The component shortages are expected to persist into calendar 2022, which could curtail revenue growth from its true potential. Ubiquiti’s stock is trading at a similar PE multiple to beginning of this year, but the business now has more cash and less debt than the start of the calendar year and a broader product portfolio.

<ul type="disc"><li>A steady flow of demand during the June quarter kept inventory levels suppressed at Ubiquiti (UI). It has been a regular occurrence to observe Ubiquiti sell out of specific products. During the June quarter it was a little more profound than in prior quarters, especially with Wi-Fi 6 devices.</li></ul> <ul type="disc"><li>Ubiquiti has reported three straight quarters where revenue was near or above $470 million. The consistent website traffic from Similar Web, along with Google Trends data, suggests the June quarter is likely to remain in the same proximity.</li></ul> <ul type="disc"><li>Component and shipping issues that have plagued many companies could play a role for Ubiquiti in the June quarter, and act as a ceiling on the quarter.</li></ul> <ul type="disc"><li>The introduction of Ubiquiti’s phone system earlier this year continues to impress us with Ubiquiti experiencing continuous sell outs of the headsets it has available. We maintain an expectation the rollout of Ubiquiti’s phone system to create a recurring revenue model for the Company.</li></ul>

A steady flow of demand during the June quarter kept inventory levels suppressed at Ubiquiti (UI). It has been a regular occurrence to observe Ubiquiti sell out of specific products. During the June quarter it was a little more profound than in prior quarters, especially with Wi-Fi 6 devices. Ubiquiti has reported three straight quarters where revenue was near or above $470 million. The consistent website traffic from Similar Web, along with Google Trends data, suggests the June quarter is likely to remain in the same proximity. Component and shipping issues that have plagued many companies could play a role for Ubiquiti in the June quarter, and act as a ceiling on the quarter. The introduction of Ubiquiti’s phone system earlier this year continues to impress us with Ubiquiti experiencing continuous sell outs of the headsets it has available. We maintain an expectation the rollout of Ubiquiti’s phone system to create a recurring revenue model for the Company.

<ul type="disc"><li>
Ubiquiti (UI) reporting better than expected fiscal third quarter (March) was only part of the story. The Company disclosed it was not able to keep up with demand due to component shortages that have spilled over into the June quarter.</li></ul> <ul type="disc"><li>Ubiquiti has experienced an elevated level of demand since the beginning of the COVID-19 pandemic that has yet to show signs of waning.</li></ul> <ul type="disc"><li>Ubiquiti has expanded its product portfolio to a degree that it should attract more customers to the brand. Ubiquiti is building a portfolio of consumer products.</li></ul> <ul type="disc"><li>We are updating our fiscal 2021 and 2022 (June) estimates to take into consideration component issues and one-times expenses Ubiquiti realized in the March quarter. We are now projecting June quarter revenue to increase to $483.6 million mostly the result of service provider revenue rising.</li></ul> <ul type="disc"><li>Ubiquiti’s sales performance affirms our reasoning for carrying a $370 price target. The stock should reach $400 as investors value revenue growth coming from multiple end markets.</li></ul>


Ubiquiti (UI) reporting better than expected fiscal third quarter (March) was only part of the story. The Company disclosed it was not able to keep up with demand due to component shortages that have spilled over into the June quarter. Ubiquiti has experienced an elevated level of demand since the beginning of the COVID-19 pandemic that has yet to show signs of waning. Ubiquiti has expanded its product portfolio to a degree that it should attract more customers to the brand. Ubiquiti is building a portfolio of consumer products. We are updating our fiscal 2021 and 2022 (June) estimates to take into consideration component issues and one-times expenses Ubiquiti realized in the March quarter. We are now projecting June quarter revenue to increase to $483.6 million mostly the result of service provider revenue rising. Ubiquiti’s sales performance affirms our reasoning for carrying a $370 price target. The stock should reach $400 as investors value revenue growth coming from multiple end markets.

UI: Expanded Product Line Supports Further Growth

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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Ubiquiti Inc. (UI US)

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UI: Steady Demand to Recurring Revenue

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UI: Expanded Product Line Supports Further Growth

Ubiquiti has managed through the component shortage issues and is expanding its product offering. Ubiquiti has launched a phone system with...

BWS Financial Inc

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