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TLAB - Tellabs


Hawks

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Anyone investing in TLAB?  Currently selling for approx. cash on hand, seems to be cash flow positive, re-structuring to its business strengths, and pays a small dividend.

 

I don't own it, but have started to take a look.

 

Sanj - care to comment?

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We've bought it a couple of times when it is under net cash, and then we sell after a reasonable gain.  We just did it about 3-4 months ago...bought at cash...and then we sold it all in the last 2 months at about a 14-18% gain.  We'll do it again if it goes below $3.

 

They are restructuring their business and moving in a different direction.  It will take time.  Depending on how they do, it could be worth significantly more than $6-7, but it will take time.  In the meantime, we use it as a cash proxy on occasion.  Cheers!

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We've bought it a couple of times when it is under net cash, and then we sell after a reasonable gain.  We just did it about 3-4 months ago...bought at cash...and then we sold it all in the last 2 months at about a 14-18% gain.  We'll do it again if it goes below $3.

 

They are restructuring their business and moving in a different direction.  It will take time.  Depending on how they do, it could be worth significantly more than $6-7, but it will take time.  In the meantime, we use it as a cash proxy on occasion.  Cheers!

 

By the way, you should listen to the conference call...that may either make you buy or not buy.  I was quite disappointed by some of the responses to the analyst questions, which I just listened to...in particular share buybacks and selling the company.  I would be resistant to buy unless the stock dropped significantly below net cash.  The analysts were a bit annoying, as they pretty much want all of the answers to all of their questions, but there was one analyst who asked some very compelling questions about share buybacks, and the response from the CEO wasn't a good one.  Cheers!

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  • 4 months later...

Hope it's okay that I bump this - now at the $2 level, TLAB is looking very compelling.  Priced below cash and just under working capital as of last filing, with no LT debt.

 

Seems Marty Whitman & Co over at Third Avenue have an activist position going, and continue to buy more shares.  Their latest letter doesn't go into specifics, just to say that their "activities at Tellabs are still a work in progress."

 

A lot of uncertainty regarding their corporate customer relationships (AT&T, etc.), but otherwise decent upside potential and margin of safety.  Anyone in?  I'm not, but may soon.

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I believe cash a/r and what not is roughly 1.80ish per share as you have to net out the cisco shares held. Your right that the upside is compelling given tbv is 2.65 not including the potential monetization of patents. The compnay has been plagued by poor management but i think Third Ave's candidate will help. The communication equip. industry is ripe for consolidation for sure.

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