12/31/2004 12:00 am EST
Jim Oberweis is a specialist in small-cap stocks. His "Octagon Strategy" assesses stocks based on eight fundamental valuation metrics, which he considers essential. For his 2005 Top Pick he looks at an Israeli play on broadband wireless networks.
"Our top pick for 2005 is Ceragon Networks (CRNT NASDAQ). At first glance, the 60% move up in the stock price in just four months might give potential investors a feeling of already 'missing the boat'. However, upon further analysis it becomes apparent that this could be just the beginning of something much bigger. Their business is broadband wireless networking systems. Founded in 1996 and headquartered in Tel Aviv, Israel, Ceragon makes products that provide high-speed, fiber-like transmission quality that can be deployed more rapidly and cost effectively than fiber-optic lines.
"The company just recently announced it received an order to supply equipment to CellularOne of Arizona, whose COO noted that Ceragon offered 'the most complete, flexible, and cost effective solution' available. In addition, Ceragon’s solutions are helping educational institutions worldwide improve information access to enhance education. In total, the company’s product family is installed with over 150 customers in more than 50 countries.
"In their most recently reported quarter, Ceragon grew revenues by nearly 60%, with improving margins and earnings of $.02 vs. a loss in the same year-ago quarter. The company just recently became profitable and, along with its climbing share price, is hitting the radars of others on Wall Street. This tiny company will not go unnoticed for much longer, and we believe currently offers an attractive opportunity for investors to get in early on a rapidly growing micro-cap company in an exciting industry."