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Carries Access Corporation (CACS) 9/26/2007
Current Price: $4.14 Outlook: Three-Month Target Price: $5.98 While Carrier Access Corporation has little to boast about in terms of an income statement, its redeeming quality is definitely the balance sheet. With no debt whatsoever, CACS is the perfect buy. Also, Insiders have not sold any shares. Insiders have actually bought shares of their own company. Analyst Opinion is increasingly optimistic coming into the Earnings Report, which will be released tomorrow (4/27/06) Profile: Carries Access Corporation manufactures and sells broadband access communications equipment to hardwired and wireless communications carriers. 62% of CACS’s net revenue was derived from CLECs, 13% from ILECs, and 5% from wireless carriers in 2000, compared to 8%, 11% and 60%, respectively, in the third quarter of 2005. Largely due to increased competition, revenue from CLECs and ILECs declined along with the adverse situation brought upon by the technology stock crash of 2000. In 2002 CACS restructured their company successfully, by increasing revenue generated from wireless carriers. CACS also cut jobs and ended up saving close to 3 million dollars. Quarterly Revenue is very volatile due to Carrier Access’ heavy reliance on the timing of large orders. The 1st quarter is a notoriously bad time of year for CACS, but analysts and investors alike think CACS can break the trend this quarter.
Fundamental Analysis: CACS recorded a 30% increase in quarterly revenue for the fourth quarter of 2005. While I do not expect the same results this quarter, Wall Street Expects the profit to be in the green. Very Few investors are shorting CACS. This is obviously due to the high expectations for this quarter. Only 1.60% of the float is shorted at the present time. CACS has a Short ratio of 3.3. Insiders at CACS are also very confident in the company. Insiders own 33% of the stock. Moreover, insiders have purchased more stock.
The only ratio worst boating is the Forward P/E. Since earnings are expected to be positive, the P/E will finally be applicable to CACS.
Insider Transactions - All Insiders are buying
Institutions have bought 1,112,260 shares, which is more than most technology stocks can say.
Technical Analysis - CACS recently hit a breakout point, which prompted me to buy it.
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