Monday May 8, 2006 Even Cramer says Buy, Buy, Buy and he has been on the opposite side of us on a few occasions where we have outlined some very good ideas for investors contrary to Cramer's picks and flip flopping. Today we are on the same side - both liking BWNG!
Also - Re-Posted from Cramer's Mad Money Show on CNBC, March 2006 - - - - - -
'UNDER THE RADAR'
LET'S GO IN THE WAYBACK MACHINE - 5 YEARS. BWNG HAD A VISION. IT WAS A VISION FOR AN ALL-OPTICAL NETWORK THAT COULD BE USED TO TRANSMIT VOICE AND DATA EVERYWHERE!
OH, WHAT DID THESE GUYS DO AT BWNG? THEY SPENT A FORTUNE BUILDING THE NETWORK. AND THEN, THE STOCK SOARED TO $1000 (REVERSE SPLIT ADJUSTED).
EVEN IF YOU'VE NEVER HEARD OF BWNG, YOU KNOW WHAT HAPPENED NEXT. NATURALLY, BWNG ALMOST WENT BANKRUPT BUILDING THE DARN THING. AND THE STOCK SANK ALL THE WAY TO $3 A SHARE.
JUST LOOK AT THIS CHART (5.5 YEAR CHART SHOWN), WILL YA? THAT IS A CHART OF HEARTBREAK; THAT IS A CHART OF HEAD CUT OFF; THAT IS A VERITABLE TRAIN WRECK!
OBVIOUSLY, WITH A CHART LIKE THAT, I'VE HATED THIS CO. FOR MANY YEARS. THEY WERE JUST BUILDING THIS NETWORK FOR YEARS, AND LEAKING MONEY ALL OVER THE PLACE. HOW COULD I, CRAMER, LIKE A STOCK LIKE THAT?
BUT, YOU KNOW WHAT? THINGS CHANGE; THINGS CAN GET BETTER. NOW, BWNG IS FINALLY FINISHED BUILDING THEIR OPTICAL NETWORK. IT'S UP AND RUNNING AND BWNG SHOULD HAVE POSITIVE CASH FLOW NEXT YEAR.
ALREADY, THE STOCK HAS $1.50 IN CASH PER SHARE, AND IT'S ONLY TRADING AT $9, GIVE OR TAKE, BUT NOBODY SEEMS TO NOTICE! EXCEPT FOR CRAMER.
BWNG IS FINALLY BREAKING OUT, AND THE ONLY PEOPLE WHO KNOW THAT ARE THE PEOPLE WHO WORK THERE, AND CRAMER!
EVEN THE WORST, MOST BROKEN CO., CAN STILL TURN ITSELF AROUND, AND YOU CAN CATCH THAT TURNAROUND, AS LONG AS YOU KNOW WHAT TO LOOK FOR.
I THINK BWNG IS NOW A HUGE BUY!! YOU CANNOT ALLOW YOURSELF TO BECOME INFLEXIBLE JUST BECAUSE THE STOCK CAME SCREAMIN' DOWN 1000 POINTS, AND THEN FLATLINED FOR A FEW YEARS. YOU BECOME INFLEXIBLE - YOU MISS OPPORTUNITIES, AND OPPORTUNITY IS WHAT THIS GAME IS ALL ABOUT.
I THINK YOU WANT SOME COLD, HARD EVIDENCE BEFORE YOU PRONOUNCE SOMETHING AS BROKEN AS THE BWNG, TO BE ALIVE AND KICKING.
THE POSITIVE CASH FLOW IS GOOD; CASH ON HAND IS GOOD. THAT'S FAR, FAR FROM ENOUGH. OKAY, SO THEY'RE DONE WITH THEIR OPTICAL NETWORK. YOU STILL NEED MORE THAN THAT BEFORE YOU PULL THE TRIGGER ON SOMETHING AS DECIMATED AS BWNG.
YOU CAN REALLY SEE THE TURNAROUND HAPPENING IN THE NUMBERS. FOR THE 4TH STRAIGHT QTR., BWNG IMPROVED THEIR CASH FLOW BURN RATE, SO THEY'RE EATING MUCH LESS MONEY. LAST QTR. WAS THE FIRST QTR. IN 5 YEARS WHERE THE EARNINGS BEFORE INTEREST, TAX AND DEPRECIATION (EBITDA), FIRST TIME THAT IT BROKE EVEN.
BWNG JUST MADE THEIR LAST CONVERTIBLE PAYMENT, AND NOW THE STOCK IS ALMOST DEBT-FREE.
IF YOU WANT TO KNOW WHY THE STOCK HAS ALREADY GONE FROM $4 BUCKS TO ALMOST $9 AND CHANGE IN THE PAST 10 MONTHS - ALL OF THAT GREAT STUFF IS WHY.
BUT I WASN'T GOING TO RECOMMEND BWNG BECAUSE THEY BURNED LESS CASH OVER 3 QTR.S. HEY, THAT'S DARNING WITH FAINT PRAISE. I NEEDED MORE WEIGHT BEHIND THE EVIDENCE BEFORE I WAS GOING TO PUT MY NECK OUT ON THE LINE.
BUT NOW THE NUMBERS ADD UP. WITH $1.50 IN CASH PER SHARE, THE CO. CAN GO THROUGH 10 QTRS. BURNING MONEY AT THE PRESENT RATE, BUT THEY'LL BE FREE CASH FLOW POSITIVE NEXT YEAR. SO IT LOOKS LIKE THEY'RE KIND OF SET WITH THE MOOLAH.
THEIR VOICE REVENUES ARE DOWN, BUT THEIR DATA AND BROADBAND GROUP GREW 15% LAST QTR. BWNG HAS BEEN SEEING INCREASED ENTERPRISE DEMAND FOR ITS PRODUCT BECAUSE THEY SPENT A FORTUNE BUILDING THIS BEST-IN-CLASS OPTICAL NETWORK. THEY ALMOST WENT UNDER BUT, PRETTY SOON, BWNG SHOULD BE GETTING OUT OF THE RED. THAT IS AMAZING; I CAN'T BELIEVE IT MYSELF.
THE BOTTOM LINE!: I THINK YOU SHOULD BE FLEXIBLE AND BUY SOME BWNG! AND I NEED YOU TO DO IT NOW BEFORE EVERYBODY ELSE STARTS YAPPING THEIR DARN FOOL HEADS OFF ABOUT THE TURNAROUND, AND YOU MISSED THE BOAT!
