Power up to PowerWave

08/05/2005 12:00 am EST

Focus:

For investors seeking to be on the cutting edge of a cutting-edge technology, I urge you to attend a workshop by wireless expert  Nikhil Hutheesing. From Wi-Fi to Wi-Max and Bluetooth to Broadband, he offers a compelling overview of the wireless future.

"Powerwave Technologies (PWAV NASDAQ) has been on a rollercoaster ride for the past few years, but the company is quickly evolving and the shares of this maker of wireless components are looking more attractive than they have in a very long time. Its core business remains radio-frequency power amplifiers used in the base stations of cellular networks. The amplifiers give wireless transmissions a boost thereby reducing signal interference and call disconnections. Among the firms that buy Powerwave's products are wireless equipment makers such as Nortel and Nokia as well as service carriers such as Cingular.

"Through opportunistic acquisitions, Powerwave is building on its leadership position as a provider of power amplifiers to wireless carriers and equipment makers. And the  strategy is already beginning to pay off. By broadening its range of products, the firm can now do something it couldn't do before: take advantage of cross-selling opportunities. Another benefit is that it can offer a package of its own products to customers rather than reselling products of others.  In February, Powerwave acquired Kaval Wireless, whose  technology helps police, fire, medical, and security personnel improve communications by extending RF coverage throughout indoor facility and has been used in buildings, towers, tunnels, airports, hospitals, stadiums, mines, malls, and conference centers.

"I believe Powerwave is on track to become one of the leaders in the mobile systems components market. The company's  gear will be in increasingly high demand as more and more wireless subscribers sign on, as usage soars, and as carriers roll out more sophisticated services. Powerwave says it expects growth of 13%-15% this year and that it will outpace the market. This is a growth and market share story. The company just became profitable in the past quarter and I think the recent acquisitions should help it to improve its margins. I believe Powerwave is a buy at current levels."

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