It is not too hard to see how PCTEL (NASDAQ:PCTI)
could parlay billions of dollars of end-market potential in markets
like smart grids, process automation, enterprise WLAN, precision
agriculture, train control, and fleet management into potentially
hundreds of millions of dollars of revenue. "Potential" is always a
tricky word when it comes to small cap companies, though, and PCTEL
doesn't have the best track record when it comes to delivering on its
potential at any given point in its past.
PCTEL doesn't trade at
particularly ambitious multiples, but then why would it? The company has
been free cash flow positive for some time, but doesn't have any real
record of attractive margins or returns on capital. I do believe that
investors need to focus on where a company is going more than where it
has been ("skate to where the puck is going to be"), but I have
questions about PCTEL's ability to truly differentiate itself as a
component supplier. I ultimately come down favorably inclined toward
PCTEL, but near-term headwinds in wireless infrastructure spending could
stretch out what has already been an extended wait for market-beating
performance.
Read the full article here:
The Frustrating Wait For Value Realization At PCTEL
No comments:
Post a Comment