Entropic
Wed, Sep 8, 10:16 PM ET, by Jeff T. - Freshman Equities Trader, Hedge Fund Live
Entropic Communications, Inc. (ENTR) Price: 8.54 Shares Outstanding: 72.57M Market Cap: 605.21 P/E (Forward 2011): 13.90 52 Week Range: 2.23 – 8.56 Thesis As we enter an era of Smart TV and everyone calling for death of Cable/Digital TV there is one final growth story. With big names in tech like AAPL and GOOG, looking to compete with Hulu in bringing network television to the internet, Entropic Communications has become a major player in the TV chip set marketplace and I believe the majority of the growth is yet to come. Business Entropic was founded in 2001 with a vision to move high definition video into and throughout the home. Entropic went public in 2007 and now stand as the leader in MoCA technology. MoCA (multimedia over coax alliance) technology has changed how multiroom DVR and IPTV video delivery services are transferred throughout the house. Entropic's products include home networking, broadband access, DBS outdoor unit, and Silicon Tuner. Home Networking At the core of Entropic's home networking business is their chip that allows you the ability to record and share digital videos simultaneously in every room. These also build the technology that gives you the ability to access games from various locations in your house and merge/share media data throughout your home. DBS Outdoor Solutions In traditional satellite installation each tuner requires a unique cable from the satellite dish to the STB (set top box) to receive the full channel line up. DBS outdoor solutions eliminates this and can support up to 12 tuners over a single cable and can leverage cabling already in the house. This technology will lower the cost of upgrades and instillation. Positives - With Entropic's technology consumers are now able to watch any digitally recorded show on any other set-top box in the house at roughly 10 dollars more per STB per month. - A study shows that there are roughly 43 million digital TV subscribers with each owning three TV's on average. ENTR will receive 8 dollars per TV, making this a million dollar opportunity. Entropics revenues in 2009 were $116 million. - Verizon Fios was the first service provider to launch this service and Entropic is expecting DirectTV, Comcast, Cox Communications, and Time Warner to do the same in the coming months. - Entropic is the major player in the MoCA market controlling 95% as of April and as competition continues to enter the market place ENTR is becoming a possible takeover target. The Benchmark Company feels ENTR would be a good fit for Atheros because of their Broadcom-like bundling strategy. Marvell also recently acquired DS2 Technology. DS2 is not a direct competitor of ENTR but is in the no new wires business. Negatives - Entropic's stock has done very well in the last week closing on Friday at 8.35 ten cent's off of the 52 Week high made that day. The stock traded as low as 6.77 on August 25th so a pull back could be in the cards. - Looking at the numbers if ENTR keeps margin's in-line with Q2 2010 it will be hard to meet the bottom line profit estimate of nine cents per share. - TTM P/E is high at 135, but this is a new growth story and their isn't another pure play name in this space to compare with Entropic. - Competition is starting to enter the market and some analyst's see Broadcom potentially taking 33% of the $1 billion market. I like Entropic because of the potential growth and little competition. Everyone has been speaking of death of cable/digital TV with the emergence of Smart TV, but, I believe it will take years to implement this strategy. For example, look at Blockbuster and Netflix, people have been talking about the death of Blockbuster forever and Netflix has really just taken off the last few years. Giving consumers the ability to watch any show at any hour from any STB in the house for a price of $10 a month has tremendous growth and this is the next logical step for home viewing. Visit HedgeFundLIVE.com.
Experience Hedge Fund Live; the web site gives you access to a Transparent Hedge Fund through its virtual trading environment. As a special offer to Self Directed Investor visitors, you may use the following price reduction code and receive a 33% discount: SDI33P. You may also choose the Premium Membership 4 Week Free Trial option when you register. Sign up NOW for a 4 Week FREE TRIAL, receive the 33% discount and enter Hedge Fund Live!
SDI Glossary: "price" Definition
This Article's Word Cloud:
Communications
ENTR
Entropic
Fund
Hedge
Live
MoCA
Netflix
Week
With
ability
access
also
because
believe
cable
chip
competition
death
digital
discount
dollars
each
enter
from
gives
growth
high
home
house
like
line
market
million
networking
over
player
receive
service
share
show
technology
that
their
there
this
throughout
will
with
years
More articles: 1 2 3 4 5 6 7 next »
| 
RSS