Tuesday, January 12, 2016

Seeking Alpha: PCTEL Struggling To Grow

About a year ago, I thought PCTEL (NASDAQ:PCTI) could be an interesting overlooked opportunity if the company could take advantage of its growth opportunities in WLAN, fleet management, train control, and LTE build-outs. Unfortunately, those opportunities really haven't materialized, and the company has seen organic revenue weaken considerably, taking margins along for the ride.

With the shares down almost 40% since my last piece, a lot of damage has already been done. Looking ahead, the market seems to be anticipating very little revenue growth and/or no margin leverage. That is probably an overly grim assessment, but it is very difficult for me to look at this company's history of poor revenue growth, weak margin leverage, and poor returns on invested capital and say that investors should make the leap of faith that PCTEL will return to growth. The potential may be there, and management has a commendable record of returning capital to shareholders, but I can't see a reason to own until there is at least stability in the organic revenue trajectory.

Read the full article here:
PCTEL Struggling To Grow

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