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Ambitous' comments are pretty much reflected in the Q1...

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imran khan

785 Posts.

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30/10/14

11:29

Post #: 14206583
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Originally posted by ambitious.1 ↑

Agree Vfrioni. The core business (ex GO sales) is roughly breakeven and (imo) does not have the ability to reach a point of scale whereby in 2-3 years it is worth multiples of the current share price. It may be 'cheap' but without the ability to become substantially larger no small cap fund managers will take a position in WRR. It all rests on the OEM opportunity. On this front I think management's comments are in line with the announced orders. Given they ship on time then I'm expecting a marginal improvement this year. If there are delays the result will be flat.

I still think the impact from the SatPhone Subsidy ceasing may be larger than anticipated. There is a risk from delays with Iridium's launch schedule (look at what's going on in Russia). And a respected shortseller recently released a detailed report basically saying GlobalStar (the company which produces Iridium GO's main competing product - Sat Fi) is worthless and should go to zero - http://kerrisdalecap.com/wp-content/uploads/2014/10/Globalstar-GSAT.pdf

WRR is cheap, but there is a lot going on here that investors need to be aware of and not just take the numbers on face value, apply a market multiple and assume it will be re-rated.

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Ambitous' comments are pretty much reflected in the Q1 commentary - still not acheiving the necesary top line growth.

Also of concern is the seemingly never-ending R&D investment ahead of sales, given the rather short product shelf life.

Still very cheap, but I don't like the lack of earnings visibility (and the high dependence on one-off contracts).

However, it is a far improved investment proposition (given its debt free balance sheet, and succesful commercialisation of GO) than 6 months ago.

WRR Price at posting: 15.5¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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