Some reasons to be excited in the Q1 press release!!!Hello All,
A bit slow to respond to this one, sorry. I think there were some very important information provided in the quarterly release.
There were 2 very important pieces of information in the press release, one expected, the other was not. The first was,
"we are driving towards initial deliveries for field testing by satellite operators and selected resellers by the end of 2024".
Given we are almost in May, that means that the product is finished its first phase (no pun intended) of development, it is shipping to operators in the next 6-7 months and we should start to see the catalyst for the stock of new (and what I anticipate to be) very high margin orders. This is what we have all been waiting for and the waiting is finally over. This is great news.
I am hopefully, that CMI will be able to announce the names of the operators that the PAA will be sold to. If there are sales to StarLink / Kupier / etc... I anticipate that the market will get VERY excited about this development.
The unexpected, and very positive news, was,
"In addition to this, C-COM's Analog Beamforming Integrated Circuit project is progressing well. We expect to test the first version of these by the end of this year."
The announcement of an analog product provides CMI with additional access to some very large markets. It seems they are leveraging their RF signal manipulation capabilities to create adjacent products. I think the analog beamforming technology has very substantial market potential, particularly in the advanced WiFi signal market. There are other applications in radar and imaging that this technology could apply to but the communications market seems to be CMI's core focus to pursinging the WiFi signal / antenna market makes more sense (MIMO, mMIMO).
If you want to read about analog beamforming, I found this interesting,
https://resources.system-analysis.cadence.com/blog/the-basics-of-digital-and-analog-beamforming-with-phased-arrays
Chapter 4 / pg 19
https://www.commscope.com/globalassets/digizuite/542044-beamformer-explained-wp-114491-en.pdf
The analog beam forming technology also has application for 5G / LTE / advanced WIFI. I am very encouraged that CMI has taken their beam forming / antenna capabilities to multiple markets. This is more opportunity for use as shareholders to see sizable increases in revenue / profitability by leverage similar capabilities within CMI.
The market that CMI has built advanced capabilities in have many important derivative / adjacent markets. With this new product announcement, I am hopeful that perhaps other new, high volume products may also come at a later time. The optionality embedded in this stock is stunning. As shareholders, we just need a tiny penetration of any of these markets and we could see the stock go up 10X, 20X, 50X. I am considering selling down another position to add more CMI stock at the current low prices even though this is already my third largest position.
The financial performance is, for me, among the least important elements. I am happy to see that the company was able to remain profitable which is always assuring in an investment. The most important financial element was the massive growth in topline revenue. 25/Q1 2.63M vs 0.68M 24/Q1 and increase of 387% Q-Q.
CMI's revenues can always be lumpy and this could be a timing issue relating to the shipment of a large order. What would be nice is if this were the beginning of early sales from the phased array antenna.
I will reiterate my belief that the dividend on this stock should be cut immediately. Similarly, if you own this stock for a 3.9% yield I think you should reconsider why you own this stock. CMI is a potentially explosive growth equity. When one of their new products gains market traction, the company will likely need all of their working capital to fund production, work in progress and receivables.
I encourage everyone to voice your opinion that CMI shuld cut the dividend. Leslie Klein is the primary beneficiary of the dividend. Let his interests perfectly align with ours. All resources should be focused on the development, launch, and sales into the exciting new markets that the company has built products for.
I continue to wait paitently for the huge upside I expect from CMI.