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Growth at a reasonable price

August 14, 2014 | About:

UBNT – After 6 consecutive quarterly beats, I believe this stock is a double bagger within 12 months and a 10 bagger over 10 years. Insiders own more than 60% of all shares, leading the charge is CEO Robert Pera with a cool 57M shares. The company has an impressive business model that takes all the traditional money earmarked for marketing and sales in order to invest in R&D and drive down costs creating unbeatable performance/value products while perserving profit margins above 30%. The company trades at a forward P/E of 15, with a PEG of 0.77. With new product launches, first mover advantage, bullet-proof balance sheet and a debt ratio of 0.26, this racehorse is positioned to dominate and take market share from established industry leader CSCO. The recent earnings call from CSCO demonstrated the success of UBNT's business model in the emerging market where they have failed.

IPGP – After a volitile few years, the heavy investments made by this first mover in the fiber optic laser space finally paid off with a nice 20% growth on the top line. The CEO expects demand to rise; in additon they are building out capacity and diversifying their lasers into many different applications: 3D printing, sapphire and glass cutting, medical use, parts manufacturing, etc. With a PEG of 0.70, cash rich balance sheet, debt ratio of 0.01 and a forward PE of 16, I expect continued growth to pick up for this disruptor as the need for cheaper, higher precision, lower power, cost effective lasers become the new manufacturing default choice.

YNDX – Growing 30% year over year, this search giant is the Google of Russia. Innovative CEO and a buyback is taking advantage of the current crisis in Russia. Compare its P/E of 20 with Google, Bidu, whoever. I believe when political upheaval is in the rearview mirror, so will the undervalued metrics of this growth monster.

Rating: 5.0/5 (1 vote)



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GuruFocus has detected 5 Warning Signs with Ubiquiti Networks Inc $UBNT.
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