ADTRAN, Inc. (ADTN)’s Looking Like a Bargain

Page 1 of 2

“How much worse can things get?” is never a glowing endorsement. But in the case of ADTRAN, Inc. (NASDAQ:ADTN), it’s hard to not like the company’s prospects after it lost 34% of its value in 2012. But Adtran was not alone. It was one of several names (including Alcatel Lucent SA (ADR) (NYSE:ALU)) that suffered in the poor carrier-spending environment. But these shares look interesting. And with continued improvement in its business and consumer demand, Adtran could be one of the best bargains in the sector.

In-line quarter was as good as a beat
When Oracle Corporation (NASDAQ:ORCL) picked-off Acme Packet, Inc. (NASDAQ:APKT), I started canvassing the sector to figure out who was next. I thought it signaled consolidation. And considering Acme Packet’s tough time — posting soft revenue due to its heavy reliance on carriers — ADTRAN, Inc. (NASDAQ:ADTN) was as good a candidate as any. Adtran’s fourth-quarter results weren’t great, either, but were in line with expectations. Revenue dropped 20% year over year and 13.7% sequentially.

As has been the case with larger players like Cisco Systems, Inc. (NASDAQ:CSCO), Adtran’s enterprise hardware was heavily affected, down 6% year over year. But the company was able to offset the slowdown with growth from dealer channels. And I think this area will be key this year — and as ADTRAN, Inc. (NASDAQ:ADTN) is assessed in the future. Likewise, the company is making strides with value-added resale channels, which increased 12%, helped by growing demand of the Bluesocket wireless LAN product.

Adtran continues to be underestimated for its technology. While this company is not flashy and doesn’t generate headlines, it does not mean it lacks in innovation or demand. Both broadband access and Internetworking haven’t performed as well lately. But these are good businesses that should see a revival going forward. However, the weak spending environment really took a toll on a sequential basis. Even so, broadband surged 100% year over year. Surprisingly, though, amid tough fiscal concerns overseas, Adtran posted 9% growth in international revenue.

This quarter was far from robust. But it was consistent with what the Street has been seeing from the likes of F5 Networks, Inc. (NASDAQ:FFIV) and the aforementioned Acme Packet. In-line results in this environment are wins, as far as I’m concerned. And it seems investors seem to agree. The stock has been up as much as 14% since the announcement.

Where’s this company going?
I’ve always liked Adtran. But its lack of aggressiveness and conservative approach gets lost in sector that is dominated by big egos. The company’s acquisition of the Broadband Access Business — or BBA– from Nokia Siemens, which completed last year, was a welcome signal that perhaps things are beginning to change. I think this company has a chance to become a leader within a recovering industry.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!