The kick in the teeth Powerwave Technologies (Nasdaq: PWAV) executed Friday is still killing this penny stock as it closed at $1.22, down -7.51%. PWAV management decided that it would be a good idea to notify shareholders that the upcoming earnings report will not meet expectations. At least if management had waited until Monday shares in PWAV may not have dropped -46.49% in the last two trading sessions.
In a blunt and to the point release, Powerwave Tech reported that Q1 revenues should come in at somewhere between $40 and $45 million. No reason why. No comments on expectations for Q2 to be better. Nada! Just here you all go, have a nice weekend and #%@! off. To view the PWAV announcement, click here.
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PWAV Stock Snap Shot:
Market Cap: 38.73M
Enterprise Value: 226.80M
52-Week High
(May 3, 2011): 23.85
52-Week Low
(Feb 21, 2012): 1.12
Avg Vol (3 month): 1,151,910
Avg Vol (10 day): 2,068,150
Shares Outstanding: 31.74M
Float: 25.62M
% Held by Insiders: 0.57%
RSI clearly indicates that PWAV is nearing an “oversold” point which could lay ground to a short-term entry point. MACD is clearly indicating that PWAV has taken a turn for the worst and waiting to see if can stabilize at around its 52-week low would be a smart move.
Powerwave Technologies reported that Nokia Siemens Networks accounted for approximately 16% of their 2011 sales. This could be one of the main factors bringing down PWAV’s stock price. PWAV wasn’t really a $23 stock.
Valuation: Effective October 28, 2011, Powerwave effectuated a reverse stock split of the PWAV issued and outstanding shares at a ratio of 1-for-5. The Reverse Stock Split had the effect of reducing the number of outstanding shares of PWAV Common Stock from approximately 158.4 million shares to approximately 31.7 million shares.
To view the SEC filings for PWAV, click here.
Bottom Line: PWAV was a $20 stock (valuation)less than a year ago. (View 3 year Stock Chart here) 3 quarterly revenue targets have now been missed which began with Q3 of 2011 in November when PWAV reported revenues of $77 million on estimates of $168 million missing by more than 50%.
PWAV is one of those cheap stocks that you are forced to add to your list of penny stocks to watch and consider a buy on if you want to take a chance that they somehow turn things around. From $23 to $1 is one hell of a drop so you gotta think there are shareholders out there that still have stock at $5 and above which makes the float even smaller. Think Long on PWAV.
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