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Revision 5-19 Score is negative now.CALL, magicJack Vocal Tec Ltd Snapshot scores high at 7 of 10

 

Overall Score: 7


Trading Chart: 0

The chart is neutral to me at the moment.

magicJack Vocal Tech has been magic to shareholders recently

 

 

 

 
Analyst Opinion: 1

Strong Buy 1
Buy 1
Hold 0
Underperform 0
Strong Sell 0

 

Insider Trading: 1

Recent insider buy at by Dir Ventor of 22,000 at $23.07 on 4/13/12 is a strong endorsement

Management Discussion and Analysis: 1

Potential E911 regulation fees for nomadic VOIP providers

Network Neutrality is key in the Company being able to provide it’s services to customers

Change in contributions to USF will negatively impact net income

Continued product and service innovation will be require to grow revenue

Company’s product are subject to intellectual property infringement

Majority of sales are through independent retailers

As a CLEC the Company is subject to changing regulation

Company purchases switching elements that are key to its operations from it’s competitors

Broadband telephone service is growing and as such is not subject to regulation, but this might change in the future

Privacy and online security risks are a concern

Israeli Company, therefore certain US laws and judgements may not be enforceable

Potential lawsuit against 3 telecoms for $25.9mm in access services rendered being debated by federal courts, clarified by FCC rulings

Revenues in 2011 were lower as a result of lower unit sales, lower access and termination charge revenue (related to FCC ruling), partially offset by higher renewal revenues, related products and prepaid minutes

Direct sales were 43%, 27% and 35% in 2011, 2010 and 2009

Company is guiding to 20-30% revenue growth, $1.25-$1.50 2012 EPS an $2.00-$2.25 2013 EPS

Share buyback to resume, increased by $20mm

 

 

Stock Performance relative to Market: 1

 

Sector Outlook: 1

Good revenue outlook, increased clarity on billing for accessed services, new product introductions and product maturity should provide revenue stability and growth

 

Cash Flow: 1

Cash flow is higher than net income, primarily because of a recent FCC ruling and large amounts of deferred revenue

2009 2010 2011
Revenues $116.8 $119.7 $110.5
COGS 63.1 57.2 51.2
Gross Profit 53.7 62.5 59.3
SG&A 78.4 64.8 63.9
EBIT (24.7) (2.3) (4.6)
Stock Comp 0.3 5.1 2.4
Doubtful Accounts 1.6 6.7 16.4
D&A 2.9 2.9 4.2
EBITDA (19.9) 12.4 18.4
Capex (0.8) (2.6) (1.0)
Working Capital 44.5 9.4 5.5
FCF 23.8 19.2 22.9
CFO 23.9 23.4 25.3
CFI (9.5) 0.1 (9.0)
CFF (4.0) (8.2) (32.0)
Net Income (0.8) (1.6) (22.5)

 

PEG Ratio: 1

Forward P/E 19.37
2012 2013
EPS 1.27 2.25 77.2%
PEG Ratio 0.25x

 

Valuation: -1

Value Pro shows a 24% downside from the current price of $23.85

Adjusted FCF for 4 yrs from 10 yrs

Adjusted growth rate to 25%

10 yr treasury at 3%

Adjusted NOP%, tax rate, depreciation and investment rate

Equity risk premium assumed at 5%

Beta is taken from finance.yahoo

 

Catalyst: 1

Increased consumer adoption rates, increased product offerings, increased stability with regulation and rate determination

 

 

 

 

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