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November 21, 2009
Wireless Broadband Pureplay
March 19, 2004By Ben Berentson
Forbes.com
NEW YORK -- Tobin Smith, the editor of ChangeWave.com, continues to be one of broadband voice's biggest supporters. "When you're talking about $5 a minute telephone charges in foreign countries, VOIP [voice-over-Internet protocol] opens up the world," he says. "In very densely populated countries, you'll have infrastructure, but for most of the world, wireless broadband is going to be the play."
In late November, Smith recommended VOIP provider 8X8 (nasdaq: EGHT - news -people ) at around $4. It has traded as high as $8 and now has settled back to slightly over $3. Now Smith is betting on Tel Aviv-based Alvarion (nasdaq: ALVR - news - people ), a company solely devoted to wireless broadband, which supplies complete systems to carriers and Internet service providers in such countries as Russia, Brazil, China, India and, most recently, Kenya. Alvarion also has announced a strategic partnership with Intel (nasdaq: INTC - news - people ) to take advantage of the new Wi-MAX wireless broadband standard. ALVR trades for around $14.50 per share.
Smith thinks that ALVR has a "dream chart," because it has found support on its 50-day moving average. The stock pulls back to this level and then bounces off of it--and it has been doing this for more than a year. Right now the stock is just above its 50-day moving average, and Smith thinks this is an ideal entry point. He also notes that ALVR is exhibiting the "classic pullback on light volume and expansion on heavy volume," a sign of upward buying pressure. Smith has placed a price target for next year at $25 to $28, and believes that Alvarion has a real chance to be acquired by one of the major telecom players, such as Nortel Networks (nyse: NT - news - people ) or Ericsson (nasdaq: ERICY - news - people ).
