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PCTEL, Inc. (PCTI)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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5.59+0.02 (+0.36%)
At close: 04:00PM EST
5.60 +0.01 (+0.18%)
After hours: 04:10PM EST
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  • C
    Commandor58
    I bought some more in the low $5.60s today, 11/29. Recent news by AT&T and VZ will be adjusting their networks to accommodate the FAA, will mean increasing use of scanners. It may not result in immediate incremental sales, but it is real world confirmation that the 5G spectrum is more complex, with many different iterations. More complexity means increasing use and sale of scanners.

    Recent comments out of China, have them 10X the size of their 5G footprint-scanner sales will be up in China the next few years.

    For practical purposes, PCTI is an orphan stock-with minimal coverage-estimates for the 4th Q and 2022 very modest. If you subtract the net/net of $2.70/share, the business sells for $3.00/share or $54 million or .6 PSR of 2022 sales estimate of $90 million. The business should sell for 2 PSR or $10.00/share. Add back the net/net and the stock should be $12.70.

    Not going to happen the rest of 2021, but double digits are doable by mid 2022.
  • C
    Commandor58
    Qwery7, in recent years, always shows up near the bottom of PCTi's trading range-making his/her posts an wonderful contra-indicator.

    Excellent commentary by Mgt today, 11/17, at the Ideas conference. In essence, the total TAM for the scanner business is going to grow to $250 million in the next new years vs the historical norm of about $100/yr million when only cell phone companies were buyers for 1G-4G upgrades. New end markets are public safety and government intel and spy agencies-including allies.

    That business should be a steady grower from the mid $20 million revenue to the mid $30s-2023 or 2024 could be a spike closer to $40 million depending on how much the US government and allies buy for intelligence and monitoring purposes.

    Antenna/Iot revenues, after being flat for a couple years-the dynamic being the replacement Huawei business-is set to grow double digits till mid decade, assuming the world does not blow up financially.

    All in all, the business should sell for 2X sales as fair value. 2022 sales of $90-$100 million are doable, so doing the math, PCTI should be a double digit stock sometime in 2022. If the "market" want to value the net/net of the balance sheet fully, then $12.00+/share is in play. Also, another Smarteq type acquisition would also be a catalyst above and beyond the improving fundamentals.

    Depending on the action of the broader averages, PCTI may remain rather sleepy till next year-4th Q results and 1stQ guidance being a catalyst. In the interim, accumulation under $6.00, will be well rewarded for patient value investors.
  • C
    Commandor58
    11/23, I bought some more today at $5.60-great value. May go lower as new 52-week lows tend to begat more new lows, however just becomes a better bargain as there is nothing wrong with the business.
  • C
    Commandor58
    Post did not post again-gave a complete view of what is going on. We live in a world that resembles 1930's Germany, 1950s Russia and China today. Censorship is alive and well in the US.
  • C
    Commandor58
    The peak of tax-loss selling rarely is on 12/31, so the low from tax-loss selling can be anywhere in Nov or Dec. Therefor, I continue to buy at attractive prices under $6.00.

    There is a risk though, that the peak of tax-loss selling could be the last week of Dec., but in the $5.60s-$5.80s, the reward/risk ratio is very favorable for the new year, when that artificial selling pressure ends.
  • C
    Commandor58
    11/11, bought more in the $5.60s.

    Very interesting number of contrasts between PCTI and AIRG.

    1)If PCTI were valued the equiv vs AIRG, it would be be approx. $9.20
    2)AIRG had B. Riley, Cowan, Roth and Northland Capital on its conference call
    3)PCTI is solidly profitable, cashflow positive, pays a dividend, insider buying and has the scanner business with more than double the gross margins vs the hardware wide of the business, either PCTI's or AIRG's. One could easily argue the scanner side of PCTI's business should be valued more than the hardware side on a per sales $ basis. Perhaps 2-3X sales vs the current less than 1.

    Long story, short PCTI is way undervalued. However as stated before, end of year tax-loss selling and the apparent institutional supply of stock from a change in managers, will likely keep a lid on PCTI till the new year.
  • C
    Commandor58
    11/10, nice to see some insider buying by the CEO. If I have interpreted recent CCs correctly, PCTI has increased the TAMs in all its target markets. (total available market=TAM).

    Some of those markets have excellent growth prospects: Iot, EV charging stations and scanner end markets. Specifically with scanners the public safety niche and government. Both are in addition to selling to wireless network operators. In a nut shell, 5G has more applications than prior generations, so provide more opportunity for PCTI.

    Iot is a new market for PCTI as well as EV charging stations. Bottom line, the reward/risk dynamic makes PCTI a "laydown" to accumulate inventory under $6.00. Upside, is $8.50-$10.50, down side is $5.50 if the broader averages have a hard sell off.
  • C
    Commandor58
    It the information is correct, someone else maybe able to verify, but the biggest news of the week/month/year came out of Italy.

    Italy reduced the number of Covid deaths from about 130,500 to about 3800. Italy, rightly decided to redefine a covid death as someone that died from covid vs died having tested positive for covid. Doing the math that is a 97% drop.

    Those of us that have done our own due diligence have known all along the PSR tests were yielding false positives. Also, hospitals and the whole medical supply chain had massive financial incentives to exaggerate the number of covid "cases" and "deaths". Politicians needed cover to justify lockdowns and other extreme measures. Whereas in all of history, with regard to epidemics, only the vulnerable were sheltered vs the healthier public at large which went about their business. Perhaps with caution, but with freedom.

    If memory serves me correct, the US covid "death" count is about 750,000. Doing the same math, gets the US death rate to about 22,500-lower than the typical flu season.

    We will see if this post is allowed to pass the censors, however the bigger question is how long will MSM and other institutions continue to hide the truth about covid and many other issues.
  • M
    Matt
    $OZSC conversation
    From PCTI's twitter today: PCTI is proud to introduce the commercialization of our Aerospace Equipment which will be available soon on our website. Look forward to your feedback! $0ZSC #Power #PCTI
    https://twitter.com/power_conv_tech/status/1456690254212124675?t=W_2BNKq6dPh81EP94CtZMA&s=19
  • C
    Commandor58
    11/4, showtime for PCTI after the close today. "Mkt" is expecting $.08 for the 3rd and 4th Qs. What matters most to me will be 4thQ guidance. Historically, like the last 20 years, PCTI's 4th Q has been stronger than the 3rd Q. So, it is my expectation that guidance will be a range of, at least $.10-$.12.

    Since the dividend was declared, the stock has grinded higher from the low $5.60s to just above $6.00. It is my view that Royce, still a net seller, backed off a little bit, but will resume selling into strength should guidance be "strong" or commentary positive.

    Eventually, another institution will have to do a "cross" with Royce to clear out the overhead supply. I suspect Royce will want, at a minimum, something in the $6.20s-30s-which was the price area of cross on 9/28.
  • C
    Commandor58
    11/5. I bought some more at $5.65-reward/risk gets better as the stock moves lower. What we will have, in the absence of insider buying and another stock buy back plan, is tax loss selling and indifference-will put downward pressure on the stock for the rest of the year.

    However, that will create a bigger bargain for 2022. Currently-I think there is only one analyst estimate-for 2022 earnings are: $.03, $.06, $.12, $.14 for Qs 1 through 4 or $.35/share for the year. I think that is way low, as the low will be $.40 with the possibility of $.50/share.

    Sometime next week, if that analyst still follows PCTI, will come out with new numbers, probably higher than the current $.35/share-the market may not care, In the interim, the antenna/Iot side of the business is doing well, after a couple years of going nowhere. The scanner side of the business will improve as Asia, Europe and Brazil dole out 5G licenses, with the buyers beginning to build out their networks. As mgt stated in the CC, only 20% of the world's cellular footprint has put 5G into service. That leaves a big runway for a couple years for scanners(software) and hardware to be strong.

    PCTI is priced like it is a company in trouble-it is not. On the other hand, for the first time in a few years, both divisions are looking at y/y growth-perhaps by double digits. At some point the "market" will care.

    As always just one man's opinion.
  • C
    Commandor58
    A couple clues as to the magnitude of how out of whack the US and lets say Germany's 10yr are vs where they should be.

    Historically the US 10 year should yield equal to nominal GDP or 2.5-3.0% over inflation.

    Well, GDP is going to be 5-6% this year, then add 5% inflation, so nominal GDP is greater than 10%. For the 3rd and 4thQs GDP is slowing, let's say 3%ish, so that implies conservatively should be around 8%

    CPI, the last 5 months has been over 5%, so add 2.5%-3.0% and you get 8%ish vs today's, 10/27, close of 1.55%.

    Do similar math for Germany and you get a 10yr around 5.5% vs today's close of negative 19 BPS.

    So, just ask yourself, how will bonds, stocks, real estate and other assets will be valued if the US 10yr was 8%? They would all be crushed. Now think how much debt is pledged against these assets at current prices? Trillions in $ terms, maybe hundreds of trillion of debt, in all currencies worldwide.

    Now you see why a fear a grab for liquidity sell off, that will usher in an inflationary depression that may last the rest of the decade.

    Two dynamics will characterize the process of this financial meltdown:

    1)Efforts by central banks to reinstitute or increase QE, to put a bid under bonds, will only make inflation worse-sending interest rates higher

    2)The full faith and credit of the US and other, perhaps many, countries will come into question. Defaults, at the government, corporate and individual level will be commonplace for several years.
  • C
    Commandor58
    Just FYI for this venue, the one analyst estimate for earnings the the 4thQ and 2022 1-4th Qs are as follows:

    $.08, $.03, $.06, $12, and $.14. Summating for 2022 is $.35-which I think is way low.

    PCTI will most likely earn $.09-$.10 for the 4th Q. For next year, I think earnings will range from $.40-$.50/share with sales in the $90-$100 million range.

    Just look at the businesses they are in: 5G, Iot and EV charging from a wireless point of view. At $90 million sales for 2022, sales/share will be $5.00. At $5.70-less $2.70 net/net, the business is selling for $3.00/share of .6 PSR. PCTI is cheap at 1X PSR. Quite frankly PCTI could sell at 2X PSR, or $12.70 sometime in 2022.

    Obviously, just one man's opinion, but having made money and never lost any money in PCTI for 20+ years-buying pessimism and selling into optimism, buying below $6.00 and holding for greater than $10 will be a great investment. Also, having followed mgt over the last 20+ years, PCTI is better positioned and managed that it ever has been.
  • C
    Commandor58
    Establishing that PCTI is cheap, and that the reward to risk ratio is very favorable to the bulls was easy-the "market" will think so over time as well.

    Now come the harder stuff. Since gold and silver have starting moving higher and building some momentum, a new initiative has started to buy physical gold and silver to "break" the paper supplies of G/S that keep prices down on the London and New York exchanges.

    The promulgators are attempting to attract the Reddit crowd and urge crypto owners to part with some of their gains to buy physical G/S. Many may recall, at least as far as silver, this attempt back in Feb/Mar was successful at pushing the price up over $30.00 for a short period of time. Also, going back to 2020 summer, shortages of physical G/S forced the Comex and other exchanges to extraordinary efforts-some of them rather fraudulent-to remain orderly, gold did make its high in Aug 2020.
  • C
    Commandor58
    The FED has already been tightening visa vie M2 and the monetary base. Further tightening will be a mistake, but lead to a great buying opportunity next year. All in all, it sets up a blow off top into late 2022/early 2023 to 5500+ for the S&P 500.
  • C
    Commandor58
    Ran across an interesting article, don't know if it correct, but it reinforces my well research belief. The article stated that Co2 levels in the atmosphere have rarely been lower than they are now-measured over the last 550 million years.

    Co2 is not a pollutant, in fact it is essential for life. Research by Michael Shellenberger and Koonin make that obvious point. The larger political picture is the whole green alarmist agenda is to concentrate power in the various mega capitals for the benefit of the political elite and their patrons that feed off that government largess.

    It is as simple as that.

    Let's see if this post makes it past the censors.
  • C
    Commandor58
    What is the deal, macro econ news is not allowed on this venue? The 75%s or JJs are at the censor button again.
  • C
    Commandor58
    In past posts, I have quoted the psychological/analytic contrast between the 25%s and the 75%s. The % breakdown is from psychological studies. 75% of people are either unwilling or unable to look or analyze a problem to its 2nd or 3thd level, beyond their initial emotional reaction (1st level). The 25%s, on the other hand, suspend their emotional reaction to look/analyze deeper to what is really going on-those 2nd and 3rd levels.

    The psychological studies flowed from Nietzsche's famous observation, "To predict the behavior of ordinary people in advance, you only have to assume that they will always try to escape a disagreeable situation with the smallest possible expenditure of intelligence."

    The implications of this are huge and have far reaching influences.
  • b
    bb06
    News on KTCC with new contract, up nicely AH's...Good Luck.
  • C
    Commandor58
    Just did a thoughtful post on world interest rates and inflation. Showed up initially, I was going to add a comment and 5 minutes later it was gone.

    I will add this comment, the Treasury upped their 4thQ issuance estimate from $703 million to $1.015 trillion up $312 billion or about 44%. Makes a good backdrop for interest rates to rise, because the FED will be tapering and inflation will be moving higher while this extra supply of treasuries hits the market.

    In my view the only way the US 10 year stays under 1.70% is if the "market" starts to smell continued GDP slowdown, or recession or the debt ceiling isn't increased come early Dec.