OnestockthathasbeenbenefitingfromtheonlineboomisIsraelifirmBATM。

Thecompanyspecialisesinnichebroadbandroutersandswitchesthathelpnetworkoperatorstocuttheirrunningcosts,increasetheirbandwidthanddeliverinnovativenewweb2。

0services。

Sohowisthebusinessfaring?

AtJanuarystradingupdate,performancewasstillontrack,despitesomeofitslargerrivals–suchasCienaandCisco–reportingdifficulties。

Preliminaryresultsfor2008areoutthismonth,withhousebrokerShoreCapitalexpectingsalesandunderlyingearningspershareof$132mand7。

7cents。

Thatmeansthestocktradesonaludicrouslycheapp/eoflessthanfive,andhasabout$60m(around11pashare)ofcashinthebank。

Idvaluethefirmonaten-timesthrough-cycleoperatingprofitmultiple,discountedbackat12%–generatinganintrinsicworthofaround50ppershare。

Potentialsnagsarethatthisisasmallfirmwithheavyweightrivals。

Itsalsosuretobehitneartermbycustomersdeferring,orevencancelling,orders。

Butwithblue-chipcustomers,first-rateproprietaryproductsandthepotentialtobenefitfromNortelsrecentdemise,Iratethestockabuy。

Therewillbebumpsalongtheway,butwiththelong-termfundamentalsstillintact,coupledwithitssoundbalancesheet,investorscanaffordtobepatient。

Recommendation:speculativeBUYat24p(marketcapitalisation£92m)



PaulHillalsowritesaweeklyshare-tippingnewsletter,PrecisionGuidedInvestments。

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