Monday, May 30, 2011

"Everytime I look at a Mid-Cap portfolio I notice that the stock of Acme Packet is listed in the middle of all of them. Who are these guys anyway"

Dow Jones Industrial Average 12,442 (UP) Week ending 05/27/2011

Whenever I hear about an ACME company, the old Looney Tunes -Roadrunner and Wile E. Coyote cartoon comes into my mind. ACME had a catalog with rocket jets, gigantic elastic band catapults, a wide variety of forms of transportation and probably the most popular, a giant magnet to catch any bird that eats iron bird seed can be found in the catalog. Of course there are anvils, fake holes that a train can drive through and dehydrated boulders can all be found in the catalog as well. So whenever I see that word "ACME" it pops out at me. Meep , Meep!  (roadrunner sound)

Acme Packet Inc. (Symbol APKT, $73.53) is "the leader in session delivery network solutions. They enable the delivery of interactive communications—voice, video and multimedia sessions—and data services across IP network borders."

"Acme Packet Net-Net session border controllers (SBCs) provide critical control functions to allow mobile service providers to deliver trusted, first-class interactive communications across IP network borders. A broad range of 3G (CDMA and UMTS) and 4G (LTE and WiMAX) services and applications are supported ranging from basic VoIP to any IMS enabled service—voice, interactive video, video share, presence, instant messaging, IPTV, video on demand, RCS, IPX, and femtocell and WiFi-enabled fixed-mobile convergence."

So why is Acme Packet Inc. showing up in all these portfolios? Let's take a look at the numbers.

2011 earnings are going to come in at .89 cents per share and 2012 earnings of $1.27 per share. 5 year sales growth of 30.10% afford this stock a very PE of 82. The company has produced eye-popping Total returns with a one year return of 150.9 % and 3 year total returns of 716.1 %. No wonder it is showing up in all these portfolios.

Is this stock too expensive?  With only 254 million in revenues I would say that this one has a long way to go.
I would look to buy it on any pullbacks along the way here.

It is a great company to single out for Memorial Day since they do everything here in the USA as you can see from the comment of their CEO Andy Ory to the left pictured. Bedford is out there by Lexington in Massachusetts, where the Revolutionary War began, and the Boston area, home of the Red Sox and Patriots storied sports teams.

 Investors Business Daily stated the following:  "Bedford, Mass.-based Acme Packet's third-quarter sales jumped 56%, with per-share profit soaring 122% from the year-earlier quarter. Acme's stock has rocketed 400% in 2010."

So enjoy your Memorial Day Weekend and parades  in the US, and if you are elsewhere I hope you have a good Monday. Honor your soldiers who preserve your freedoms    ...............................................

                     Oh, and keep an eye on that Roadrunner too!


No comments:

Post a Comment