Silicom ( Nasdaq - SILC ) -- Outperforms the Industry

Silicom (SILC $18.25) reported excellent on target Q3 results.  Earnings advanced 19% to $.37 a share.  Sales climbed 15% to $11.5 million.  Silicom doesn't maintain a large backlog.  But the company indicated its pipeline of prospective business was full, suggesting another solid performance in the December period.  We have raised our full year earnings estimate by a nickel to $1.40 a share.

Existing customers exhibited rising demand.  Silicom supplies server networking products to an estimated 80 companies.  Several have experienced slowdowns in recent periods.  But many customers have installed Silicom's technology on additional systems within their line-ups.  The company also continues to add new customers, some in high potential emerging markets, particularly Asia.  The SETAC line has morphed into a complementary technology which could generate momentum in upcoming periods.  That technology never made it as a stand alone offering.  But derivatives of the technology are being implemented by a growing number of customers.

Margins expanded in the September quarter.  It's difficult to imagine them going much higher.  But Silicom has been able to sustain them at elevated levels for quite a while.  A major decline appears unlikely.  We estimate sales will continue to rise at a 15% rate next year.  Income seems capable of advancing at a similar pace to $1.60 a share.  Acquisitions could yield further leverage.  Cash and securities totalled $7.91 a share at the end of Q3.

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Allot Communications ( Nasdaq - ALLT ) -- Order Rate Eases

Allot Communications (ALLT $25.00) reported excellent on target Q2 results.  The company is the leading provider of deep packet inspection systems used by cable and cell phone networks to route data efficiently.  Where it's legal, the technology also is used to charge customers for different types of traffic.  Most of Allot's business takes several quarters to install.  Revenues normally are recognized after the jobs are finished.  So reported financials generally correspond to deals that were signed in the past.  In the June quarter sales advanced 43% to $26.4 million.  Non-GAAP earnings (fully taxed) improved 56% to $.14 a share. 

Incoming orders exceeded shipments.  Most of those deals already were in late stages of negotiation.  And while Allot did add two new large customers, most of the backlog added came from existing customers.  Financial results probably will remain fairly good through the end of 2012 due to the momentum built up in earlier periods.  But the company indicated that demand has begun to moderate because of economic factors.  Several prospective deals are been stretched out or scaled back as network operators reduce capital spending budgets.  That could be a short lived scenario if data traffic keeps proliferating.  The cell phone industry is approaching saturation in most developed markets, though.  So the growth curve could start bending lower.  Compression technology could help existing networks handle more traffic, as well.  So less investment may be required in future periods to keep pace.

We are reducing our 2012 earnings estimate by a nickel to $.60 a share.  We also have lowered our 2013 figure to $.70-$.75 a share from $.80 a share previously.  Our figures assume margins were stay at elevated levels.  Competitive pressure and economic issues might exert greater pressure on profitability.  The long term outlook continues to be favorable.  Allot has a strong technology position in a dynamic market with plenty of growth potential.  But orders are starting to moderate, the stock price trades at a high price in relation to earnings, and pricing pressure is apt to increase.  The company tries to offset hardware price declines by adding more software content.  There's a limit to how far that strategy can go, however.  Our advice is to close out positions and reinvest the proceeds in a special situation with better risk reward characteristics.

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Silicom ( Nasdaq - SILC ) -- Becomes a Value Play

Silicom (SILC $14.75) reported excellent on target Q2 results.  Growth has been moderating in recent periods, though, due to economic factors.  Demand for computer hardware continues to be relatively vibrant.  And Silicom is expanding faster than the industry because it focuses on several dynamic niches.  But the upward progression is turning more difficult.  Sales rose 10% to $10.4 million.  Earnings advanced at the same pace, reaching $.33 a share (excluding non cash stock option expense). 

The SETAC line still hasn't gained significant traction.  That technology was launched three years ago and promised to create a major new product line for the company.  In the June quarter SETAC provided just 7% of revenues, though.  While the business is likely to survive, the big contribution originally contemplated has become more of a long shot.

The core server networking operation is well positioned.  Margins already are at peak levels, though.  Further expansion is unlikely.  Sales are growing but at a modest pace, moreover.  Without a material lift from SETAC the potential for accelerating earnings growth has diminished.  Silicom holds $7.63 a share in cash and equivalents.  The P/E multiple on the core business is reasonable, too.  So downside risk is limited.  Longer term, there's no question Silicom is well managed and the company probably will fare well as computers continue to proliferate around the world.  But the basic industry is well established at this stage.  Absent a new product like SETAC, performance is likely to exceed GDP growth but not by much.  Our advice is to take advantage of the recent advance in the share price and close out positions.  Reinvest the proceeds in another Special Situation with higher growth potential.

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Allot Communications ( Nasdaq - ALLT ) -- Macro Woes Boost Demand

Allot Communications (ALLT $26.00) appears on track to produce excellent on target Q2 results.  The company is the leading provider of deep packet inspection systems used by mobile phone carriers, cable systems, and conventional telephone companies to manage Internet traffic.  Demand is greatest in Europe and Asia where those operators can charge extra depending on the type of material going through their systems.  The United States still runs under "carrier neutrality" rules where every byte of data is treated equally.  Elsewhere in the world carriers are allowed to offer discounts and implement surcharges depending on the type of data being delivered.  Video often entails surcharges.  Unlimited website access, for instance to Facebook, sometimes is made available at a discount. 

Demand remains robust.  Allot provides hardware products that are plugged into key transfer points on their customers' networks.  As computer chips become more powerful and manufacturing techniques keep improving that part of the pricing equation keeps declining.  Allot has been successful in keeping its selling prices intact over the past several years by including more software functionality with its systems.  A recent video oriented acquisition reinforced that trend.  Further product development and technology acquisitions are likely to sustain prices in the future. 

Allot remains the industry's price performance leader.  The company encounters competition from U.S. based Procera Networks, a low priced provider of standard products.  It also goes up against Canadian supplier Sandvine, which has a lock on the local market due to its lengthy history.  That company has had trouble entering other geographies, though, due to technology problems.  Two larger companies are rumored to be developing competitive technologies -- F5 Networks and Citrix -- but it remains to be seen if they'll decide to risk the money and enter the market.

Cell phone traffic historically has accelerated during weak economic periods.  That relationship is being repeated in Europe and Asia at present, forcing mobile phone and other telecom operators to keep expanding their networks at a furious pace.  Allot is well positioned to benefit from that pick up.  Our estimates are unchanged.

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Perion ( Nasdaq - PERI ) -- Girls Gone Wild

Perion (PERI $4.50) reported lower than expected Q1 results.  Performance was enhanced by the Smilebox acquisition midway through 2011.  That contribution was not included in the year earlier results.  Smilebox is a photo manipulation software package aimed at middle aged women.  Perion's core IncrediMail jazz up your email product is most popular with women, as well.  IncrediMail is free to use.  But the company builds in a search bar with the software.  Users who run a search through the software generally are directed to Google, which pays Perion a commission for the referral.  Smilebox is sold for $40 a year and doesn't generate further revenue to the company.  Perion also sells a few minor subscription products.  It is seriously considering a move into security but hasn't made a move to date.

Sales rose 30% to $11.3 million.  That figure includes revenue on pre-existing subscriptions associated with the Smilebox acquisition.  Generall accepted accounting principles ("GAAP") require a different treatment, which makes no sense.  Earnings declined 35% to $.20 a share.  The entire explanation for the decline was a huge increase in marketing costs designed to attract new customers.  That effort worked well.  But the Internet industry became more competitive in the March quarter as venture capital poured in, and existing participants lifted their own marketing programs.  A large number of longstanding IncrediMail customers were drawn away, sending their search referral business elsewhere.

Perion has laid the groundwork to recoup its IncrediMail search revenue.  Meanwhile, the photo business is booming.  That was a great acquisition.  We've reduced our full year earnings estimate by a dime to $.80 a share to reflect the heightened search competition.  On balance, though, the company appears to have enhanced its penetration of the middle aged female market with the Smilebox deal. 

Cash flow from operations is likely to reach $7-$8 million this year.  It remains to be seen if Perion can become the leading provider of Internet products to the middle age women's market.  The company has a solid foothold, though.  And it's making decent money in the interim.  Our advice is to maintain positions and see if the company can put it all together. 

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Commtouch Software ( Nasdaq - CTCH ) -- Missed Opportunities

Commtouch Software (CTCH $2.60) reported good Q1 results.  But the provider of Internet security products likely will experience tougher going in upcoming periods.  Commtouch sells anti-spam, anti-virus, and web security packages to Internet providers and private network operators under long term contracts.  Revenues are recognized on a monthly basis over the life of the agreements.  So business written in the past generates a steady stream of recurring revenue.  New business has tailed off, however, as new types of threats have arisen and more data traffic has shifted to mobile networks.  Commtouch's revenue growth rate has moderated to 10% compared to industry norms of 20%-25%.  Costs are slated to rise in the near term, as well.  New management has been added to engineer a turnaround.  Those plans are bound to entail higher product development and marketing expenses, squeezing margins further.  In spite of that demand from existing customers remains pretty solid.  Earnings probably won't fall off a cliff.  But until a new line-up is introduced growth probably will remain at lackluster levels. 

Commtouch has $.90 a share in cash with no debt.  Earnings are likely to hold up around $.20 a share this year, moreover.  So finances are solid.  Downside risk is modest at the stock's current level.  Value investors realistically can take the bet, figuring a recovery might appear within a year or two.  A strong new product line theoretically could support appreciation of 100% in the share price.  Larger competitors are moving more quickly at this point, though.  So Commtouch may face increasingly large obstacles by the time it's ready to accelerate again.  Our advice is to close out positions and reinvest the proceeds in a Special Situation with better defined near term prospects.

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Allot Communications ( Nasdaq - ALLT ) -- Breaks into the U.S. Market

Allot Communications (ALLT $25.00) reported excellent on target Q1 results.  Earnings (fully taxed) advanced 75% to $.14 a share.  Sales climbed 41% to $24.2 million.  Most of the period's revenue was derived from European and Asian customers.  Allot is the leading provider of deep packet inspection systems that mobile and landline operators employ to monitor Internet traffic on their networks to optimize performance and implement specialized billing plans.  The United States still enforces so-called "net neutrality" rules that prohibit most variable pricing schemes, except for pure volume.  In most European and Asian countries customers can purchase unique plans that segments the material.  For instance, a user might get unlimited social media like Facebook but pay extra if he exceeds the cap on video downloads.  U.S. business to date primarily has been generated by corporate networks who inspect Internet traffic to keep users away from non essential sites.

A major U.S. mobile carrier recently placed an order.  That application probably will focus on network optimization to start.  But the technology could gravitate towards variable pricing applications if the regulatory environment is relaxed in the future.  Allot also recently acquired a video optimization product line that relies on a technology platform similar to the company's.  That unit is expected to add a relatively modest $3-$5 million in sales this year.  As marketing efforts build up a substantially greater contribution is possible in 2013 and beyond.

We are raising our 2012 earnings estimate a dime to $.60 a share.  Next year $.80 a share represents a realistic target.  Allot still has plenty of room to expand in Europe and Asia.  Those markets are likely to keep expanding, moreover, creating further opportunity.  The U.S. is virtually unpenetrated altogether at this point.  That's starting to kick in.  So gains could remain vibrant well into the decade.

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Silicom ( Nasdaq - SILC ) -- Industry Headwinds

Silicom (SILC $16.25) reported solid Q1 results.  Sales improved 10% to $10.1 million.  Earnings (excluding stock option expense) rose 7% to $.29 a share.  Unit volume advanced at the same rate as revenue, suggesting little if any price erosion.  Silicom didn't lose any customers in the period.  Several new programs were established, laying the groundwork for sequential gains in upcoming quarters.  The company's high potential SETAC line showed reduced revenues as existing programs wound down.  Silicom has more than a dozen new designs in the pipeline, which promises to renew momentum later in the year.  Despite the fact more customers are being supplied with Silicom's server networking systems growth has moderated over the last two quarters due to economic factors.  The long term outlook remains bright as Internet traffic proliferates, mobile applications grow, and cloud computing and virtualization initiatives gain further prominence.  Those gains are coming at the expense of traditional computer spending, though.  And end users are deploying the technology more efficiently, reducing the number of ancillary products required.  Silicom is working on additional products.  It also is poised to reinforce growth with resumed SETAC business.  Acquisitions remain a possibility, as well.  Nonetheless, financial results are tied to a large extent to industry factors.  And the slowdown in economic activity now underway could keep a lid on growth.  Silicom is well financed and should ride out the storm without too much stress.  For now, though, our advice is hold off on making new commitments to the stock.

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Commtouch Software ( Nasdaq - CTCH) -- Mixed Q1 Outlook

Commtouch Software (CTCH $2.85) is likely to report mixed Q1 results.  Organic revenue growth of 10%-15% is probable.  Most of Commtouch's business is locked up in 2-3 year contracts, which are recognized as sales on a monthly basis as the work is performed.  The company is a leading provider of network security software for Internet providers and corporate systems.  Overhead costs have been climbing more rapidly than revenues due to a pick-up in R&D spending, executive hiring, and merger and acquisition activities.  So Q1 earnings are likely to be uninspiring despite the higher level of sales.  Those product development and acquisition efforts might be nearing fruition, however.  So positive moves could be announced in conjunction with the Q1 earnings report.  Our estimates are unchanged for now.  Commtouch has ample financial reserves.  An acquisition could financed with cash, allowing income to benefit right away without dilution.

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Silicom ( Nasdaq - SILC ) -- Core Business Remains Vibrant

Silicom (SILC $17.25) appears on track to produce excellent on target Q1 results.  The company closes a large amount of business in the final month of each quarter.  So it remains to be seen how strong the performance will be.  Silicom provides server networking products to more than 75 manufacturers of specialized computer systems.  Those units are designed into larger products, so volume generally tracks the OEMs' activity.  Pricing is consistent, usually showing annual reductions of 3%-5%.  Silicom is able to sustain its own margins by recouping those price cuts with lower component costs.  Silicom's customers slashed inventories following the 2008 downturn, exerting a temporary decline in re-order rates.  Inventories are lean these days.  Further reductions are unlikely.  Final sales by Silicom's OEM customers remain good.  Some do better than others.  Overall, the group tends to track the computer industry's performance.  And Silicom continues to beat those metrics by earning more design wins with existing customers, and by signing new accounts.

The high potential SETAC line is still gaining momentum.  More partners recently have been added.  But some past deals are evolving less rapidly than originally hoped.  In 2011 the line generated 9% of sales.  Our original 2012 estimate assumed a 100% growth rate.  A gain on the order of 50% now appears more realistic.  On the plus side, the core  business hasn't slowed due to economic factors.  We've reduced our full year earnings estimate by a nickel to $1.45 a share to reflect an uptick in SETAC business development expenses.  But our sales estimate is unchanged at $48 million.  The long term outlook remains bright.  A faster pace by SETAC could leverage results dramatically in future years.  Silicom holds $49 million in cash and equivalents, moreover.  Acquisitions could amplify results further.

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Perion Network ( Nasdaq - PERI ) -- Growth Rate Accelerates

Perion Network (PERI $5.35) reported excellent on target Q4 results.  Non-GAAP earnings (fully taxed) declined 27% to $.16 a share.  But advertising spending jumped by $2.6 million in the quarter as Perion aggressively sought to expand its customer base.  That reduced income by $.20 a share all by itself.  R&D spending remained at 21% of sales, moreover, as Perion enhanced existing products and continued to develop new ones.  Revenues are poised to advance 35% in 2012 to $50 million.  Customer acquisition costs will remain elevated as Perion keeps spending ahead of revenue to broaden its user base.  Still, income probably will be flat to modestly up for the year.  Earnings promise to surge in 2013 if advertising costs level off.  Cash flow remains positive.  That money may be employed towards additional acquisitions.

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Commtouch Software ( Nasdaq - CTCH ) -- Expansion Strategy in Place

Commtouch Software (CTCH $3.10) reported good Q4 results.  Earnings (fully taxed) rose 20% to $.06 a share, excluding non-recurring items.  Revenues climbed 11% to $5.95 million.  Commtouch is a leading provider of Internet security technology.  The non-recurring costs were associated with an acquisition the company made last year.  That operation outperformed its targets, generating an extra performance bonus.  Its previous owner recently was acquired, moreover, eliminating the residual value of the non-compete agreement it originally issued.  Commtouch also hired a new CEO in the quarter, triggering a small golden parachute.  Operating margins remained at high levels.  Sales growth appeared to moderate, but much of that stemmed from Commtouch's subscription based pricing model.  New business was solid but a significant portion was deferred into future periods.

Organic growth of 15% is likely to be sustained.  Expenses may rise slightly faster due to a more aggressive acquisition strategy.  Commtouch currently is investigating two potential targets.  Marketing and R&D costs are likely to remain elevated in the near term, as well.  New products probably will be launched this year, but the impact on financial performance will take time to materialize due to the delayed revenue recognition policy.  Acquired products could bolster results more directly.  They also could make the entire product line more attractive.  A more comprehensive line also might be sold on a private label basis, enhancing revenue potential substantially.

Our estimates exclude any contribution from new products or acquisitions.  We estimate sales will advance 15% to $26.5 million to provide earnings (fully taxed ) of $.25 a share (+9%).  Effective product line extensions could yield substantial leverage.

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Allot Communications ( Nasdaq - ALLT ) -- Order Rate Accelerates

Allot Communications (ALLT $17.00) reported excellent on target Q4 results.  Allot is the leading provider of deep packet inspection systems used by mobile and wireline broadband providers to optimize the flow of traffic on their systems.  The company's hardware resides at key gateway points where networks connect to each other.  The units are loaded up with software that checks every message going through to determine what kind of content it is, who it's coming from, and where it's going to.  Network operators apply that information to balance the load among its various data pipes, maximizing speed and performance.  Where it is allowed (not the United States) operators also can use that knowledge to establish specialized pricing schemes.  Q4 sales advanced 36% to $22.0 million.  For the entire year sales reached $77.8 million (+36%).  Non-GAAP earnings (taxed at a normalized Israeli rate of 10%) doubled to $.12 a share.  For the year income climbed 173% to $.41 a share.

Superior rates of growth are likely to continue.  Broadband traffic continues to expand at exponential rates, fueled by video streaming services like Netflix and Youtube.  Peer-to-peer video sharing services have diminished in importance with the availability of reasonably priced commercial services.  But those operations continue to push plenty of video over the Internet, as well.  Mobile and wireline networks are relying on Allot's systems to maximize performance of their existing hardware, so they don't have to spend so much on capital spending.  Allot is enhancing its value proposition by including a growing range of value added software products that help (non American) operators boost functionality while enhancing revenue generation. 

Allot's book-to-bill ratio jumped sharply in Q4.  The company landed one relatively massive deal.  It also benefited from a rush of end of calendar orders.  New orders probably will moderate on a sequential basis in Q1.  Allot does generate a high percentage of revenues from backlog, though.  So reported results are likely to remain strong in the March period.

We estimate 2012 sales will attain $100 million (+29%).  The company raised $85 million in a public offering in November.  If it can find an attractive acquisition target a significantly higher figure could be achieved.  Pretax margins are likely to keep expanding.  The addition of more software (value added services) is enabling Allot to maintain selling prices even though direct hardware costs continue to decline.  Overhead costs are going up but not as fast as revenues.  We continue to estimate 2012 earnings (fully taxed) will advance 22% to $.50 a share.  Average shares outstanding are poised to increase by 18% due to the recent equity offering.

The long term outlook remains bright.  The deep packet inspection industry remains in an early stage of development.  Demand promises to grow faster than telecommunications spending overall because the technology provides a high rate of return on cost savings alone.  Longer term, revenue enhancement could deliver even greater potential.  Competition consists of two similar sized companies, Procera and Sandvine.  The latter has experienced problems but is likely to recover.  Procera is running hot at the moment but much of that has to do with cheap pricing, creating commensurately low margins.  Cisco is floating around but hasn't become an active participant to date.  Allot has the potential to keep growing at a fast pace well into the future.  The stock is trading at a high P/E multiple presently.  Then again, why shouldn't it.  The company's track record is terrific.  The outlook is favorable.  And there's a long way to go.  Our advice is to maintain positions.

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Silicom ( Nasdaq - SILC ) -- Multi-Year Growth Cycle Retains Traction

Silicom (SILC $19.25) reported good Q4 results.  The company is the leading provider of high performance networking systems for computer servers, enabling multiple units to work together more effectively.  Silicom added a second product line ("SETAC") a few years ago that allows specialized appliance manufacturers to implement their technologies on industry standard computers.  The latter segment grew 400% in 2011 and represented 9% of total sales.  The core adapter line grew 21% and accounted for the balance.  Total sales rose 30% last year to $39.6 million.  Non-GAAP income, which excludes non cash stock option expense, advanced 50% to $1.23 a share.  (Note - We tax adjust our non-GAAP figures, while the company does not in its presentations.  So there is a slight difference between the two numbers.)

Sales growth moderated to a 12% pace in the December quarter.  Economic factors may have contributed to the reduced level of incoming business.  Silicom deals with more than 75 original equipment manufacturers and some probably deferred orders to spruce up their end of year balance sheets.  Real final demand appeared to be unaffected, though.  Silicom focuses on many of the strongest parts of the computer industry, cloud computing, virtualization, and the mobile Internet among them.  Industry trends remain robust despite the economic storm clouds.  Silicom is gaining market share as customers shift away from commodity offerings to the company's high performance systems.

Margins remain above average.  Proprietary features help the company keep pricing firm.  And once a product is designed into a customer's system orders tend flow automatically, keeping selling costs in check.  A lot of new business is generated by penetrating other divisions of existing customers.  Most research and development is conducted in Israel, where engineering costs tend to be lower than in the U.S. or Europe.  Our 2012 earnings estimate assumes gross margins will remain at current levels, at approximately 42%-43%.  Pretax margins are likely to improve a shade as sales improve at a faster rate than overhead costs.

New markets are opening up.  In 2011 North America represented 75% of sales.  In the coming year China could start to make a more meaningful contribution.  Silicom added a second major Japanese customer in 2011, as well.  It also has signed up several more SETAC users.  We estimate that high potential line will expand 50% or more in 2012 and top the $5.0 million mark in revenue.

We have reduced our 2012 sales estimate by 4% to $48 million.  That caution may prove unwarranted.  But it's possible the slower growth experienced in Q4 will persist if the macro-economic scene fails to improve.  We've lifted our pretax margin estimate a notch, though, and lowered our predicted tax rate by a percentage point.  So our earnings estimate is unchanged at $1.50 a share.

The long term outlook remains bright.  The adapter segment is bound to undergo technology transitions as the industry develops.  But Silicom appears well positioned to capitalize on those changes.  The company is not tied to any legacy technologies in the adapter segment, so it has no marketing reason to eschew the leading edge.  In addition, the SETAC line holds great potential.  Direct competition has failed to develop in that segment.  And new customers continue to sign up.  Silicom also has more than $7.00 a share in cash which might be spent on complementary acquisitions.  In 2-3 years earnings could reach $2.25 a share.  Applying a P/E multiple of 16x suggests a target price of $35 a share, potential appreciation of 80% from the current quote.

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Perion Network ( Nasdaq - PERI ) -- Smilebox Acquisition Pans Out

Perion Network (PERI $4.30) appears on track to report excellent on target Q4 results.  The company completed a major acquisition heading into the period.  That transaction provided a technology that helps less sophisticated computer users assemble attractive presentations with their digital photograph collection.  It also provided Perion with a significant and expanding customer base.  Prior to the deal the company generated most of its revenue from Incredimail, the leading email enhancement product.  Late in Q4 the company added another product to its line-up, the Fixie security package.  All three offerings are geared to older customers.  A majority of sales are made to people living outside the United States.

We estimate full year 2011 income will meet our estimate of $.75 a share.  That figure excludes non cash stock option and acquired intangible expenses.  It also includes non-GAAP revenue, mainly subscription income related to the Smilebox acquisition.  U.S. accounting rules inexplicably exclude those established recurring revenue streams from being recognized for official reporting purposes.

We have reduced our 2012 earnings estimate by a dime to $.90 a share.  Perion plans to spend more on marketing and business development than we had provided for in our previous calculation.  Our revenue estimate is unchanged at $50 million.  Perion operates in the least glamorous segment of the Internet industry.  Its focus is on people more than 40 years old, primarily women, and mostly international.  That's a tight fisted crew, making it hard to nickel and dime them for additional revenue.  Competition is less intense, though, which helps on the profit margin front.  And while customer loyalty is a fleeting commodity on the Internet Perion's retention rate is well above the industry average.

The long term outlook is bright.  There's ample discretionary income available to invest in marketing and product development while leaving pretax margins of 20%-30% for the stockholders.  Tax rates are relatively low in Israel compared to the United States.  And the market is growing.  The P/E multiple is unusually modest at 6x considering the relatively predictable nature of the business.  Perion has been through two previous management teams.  The latest group, which came onto the scene last year, seems to be delivering the goods.  We've been saying it for a while but remains true.  In 2-3 years earnings could reach $1.25-$1.50 a share to support a stock price of $20 a share.

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