For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.
"My top speculative pick for 2008 is Harmonic (NASDAQ: HLIT), a beneficiary of the 'video changes everything' theme," says Rusty Szurek with Next Inning.
"Harmonic is the only broad-line pure-play video infrastructure company of meaningful size left standing in the market today. Its three primary markets are cable, satellite and the budding world of telecom video or, as it's often called, IPTV.
"There is a war raging between these three competing methods for delivering TV programming. Fortunately for Harmonic, the bullets of differentiation these three industries are using in this war are derived from products Harmonic sells.
"Satellite operators are focused on leveraging HD programming through their inherent bandwidth advantage, but need to overcome weaknesses in downloaded video-on-demand. Cable companies are leveraging their inherent advantages to deliver rich video-on-demand experiences, but must quickly overcome bandwidth limitations to keep pace with satellite's rapid deployment of HD programming.
"At the end of 2005, Harmonic removed founder and CEO Tony Ley, and replaced him with Patrick Harshman. During his short two years at the helm, Harshman has totally reorganized Harmonic's operations. Revenues for the first nine months of this year are up nearly 30% from last year and Harmonic has now reported a record of five straight profitable quarters.
"While there are always risks and challenges for companies like Harmonic, I think it's abundantly clear that Wall Street is far too focused on the past and, as a result, is not seeing Harmonic for the company it is today: well positioned, well managed and facing what should prove to be at least several years of rapidly growing demand. Our estimated fair value range for the stock in 2008 is $15 to $20 per share."
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Reader Comments (Page 1 of 1)
12-21-2007 @ 3:23PM
Sch said...
Correction:
Tony Ley didn't found harmonic, he was hired by the founders Dr. Moshe Nazarathy and Dr. Josef Berger after they raised the first VC round. He was the 5th employee of the company.