It looks like Motely Fool has ran an article on CRNT.  It's relieving that someone else agrees with me.  Here is what Motely Fool concludes:

"At its price of about $6.50 per share, Ceragon is trading at only 15.9 times its 2007 diluted GAAP earnings per share. Company management expects net income to increase at a rate even higher than sales in 2008, so assuming that GAAP earnings grow by 30%, Ceragon's forward multiple is an attractive 12.2. Even though dilution from a share offering late last year will eat into EPS somewhat, Ceragon is still priced at a steep discount to its projected growth."

The article also gives a possible cause or two for the recent sell out, but comes down on the side that I originally did.  There's no relevant reason that the stock should be down this much.

I'm tempted to set my sell order at $16 (a double) and not worry about it.  I still think $16 or more is coming this year.  

Hi Dan, I was wondering

1. if you check the TK Research Reports to bring some added insight to your decision before,during and selling a trade
2. as well as Technical annalysis for insights.
3. If you do, how do you view them comparitivly to what you see vs your fundament Research.

Right now CRNT Research Report is fairly bearish (last updated on may 3rd)

The Technical analysis is showing short term bullish with some intermediate term bearish, Volumn is up, but lower than the previous two spikes. What looks to be like October of 07 and jan/feb 08.

I just want to get your take on the technical side Thanks for your reply

I have been warning everyone we go to 127 on the SPY and when it breaks through to 124 immediately and eventually down to 1170 by summer. Those predictions may come true, but today's volume made me a believer that we will not go down anytime soon. 485 million shares and the SPY ended up only $2.00 down from yesterdays close. That is a miracle. I have no idea who the buyer is, but they made a huge statement. Finding good stocks seems like the thing to do for now in the short term. However one really never knows. But considering 64 million shares raised the price $4.00 dollars a share a few days ago, I am with you Danny. Buy some good stocks. $16.00, you might want to lower your expectations a little!

CRNT - such a warm feeling :)

Discovered that company back in March 2007 - nice gains for many people

http://trading-to-win.blogspot.com/search?q=crnt 

WallStreetKing and Snowman,

If you look at my trades, I bought CRNT at $9.90 a share and at $9.22 a share in June of 2007.  On October 2, 2007, five months later, the stock hit $21.78.  If I had held during those months, I would have more than doubled my money.  Instead, I was swing trading and only posted about $2 profit per share.  At the time, I was only "dipping my feet" into the waters of trading, and was trading with a very small amount of money ($1,000).  --My point, is that a double is entirely possible.

    The company is actually in better shape now than it was then.  They've dilluted eps by offering a few more shares,  but I don't see it having an overly negative effect.  They're still growing at a good rate, they met expectations, the market mis-interpreted their last CC, and they have money in the bank and zero debt.  There has been no bad news, and they are getting crushed for no reason other than the market being down.  -- There could be bad news out there, or a large owner selling off due to margin calls, but generally, that talk is just speculation at this point.  Until I see bad news, I'm going to ride this one out.  Swing trading in this market is dangerous.  The swings are too dramatic. 

     Sometimes I do glance at the research reports, but when it comes to small caps, which are my favorites, I often find that research reports and other "stock grading" tools don't help me a whole lot.  They are somewhat useful, but I often find them outdated or occassionally giving low "letter grades" to small caps due to "faults" that are inherent to small cap companies (e.g. low volume).  So, anyways, I read them, and they are useful, but I'm careful not to put too much confidence in them.  My own analysis is what I trust most. 

     Primarily, what I prefer to own are small cap stocks with good management, good historical earnings reports, a low earnings multiple, low debt or not debt, and huge growth potential.  AFSI is one such company, I've made good money trading them.  Ideally, I'll find a company that meets these requirements, and I'll try one or two things.  1) If the chart shows an up and down bounce over the course of a month, I'll try to by at the bottom and swing trade for a few weeks.  I did this with AFSI a few months ago and did well.  Eventually, the market noticed their good fundamentals, and they hit $17.22.  For the most part, I had been buying and swing trading in the $13-$14. Again, if I had held my shares, I would have made more money than if I had swing traded.  However, I like the "money in the bank" aspect of swing trading because when the stock dips, I can always buy back in.  2) I'll buy and hold the stock if I can get it cheap enough, especially if it pays a decent dividend, like TCHC.  Eventually, if the company "shows the money" at earnings, the stock jumps.  The key here is having confidence in your research and being willing to wait.  Even if you have to go longer than you want, a good company is a good company. 

Anyways, I don't use the technical analysis tool on TK very often because I just haven't gotten used to using it.  I was used  to using other sites when I joined TK, so I haven't really given the TK tools a fair shake.  But, I might use them more often.  I have been reading the research reports more often. 

Generally, I like doing my own research by listening to CC, looking at historical earnings charts vs. historical analyst expections, looking at one year, one month, three month, six month, charts, reading up on all the latest news, and looking for a low earnings multiple.  If I go through the trouble to do all that, then I'm usually more knowledgable about a company than a research report is going to make me.  I read the reports, but they're usually just a summary of the much more detailed technical analysis that I've already done.  As far TK's technical analysis tools, I can't comment much because I'm just used to using other sources and haven't given them a proper chance.  I do intend to try them out a bit more though.

I might try to work up a good technical analysis post about CRNT, but for now, I generally agree with the guy that I quoted in this trade note.  There is more to my analysis than what the guy has in his discussion post, but his take was available, so I just quoted him.  Also, I've been following this company since June of last year, so I feel like I know them fairly well.

Anyways, no matter how much you follow a stock or research, bad news can always come out and crush the stock, but you do the best you can. you know?  (i think we've all got that motto in the current market.)  

I know all that's longwinded, but I hope that answers your questions.

Mr. Upshaw, I agree with your analysis of the company. You know I try and focus on what moves the markets rather than an individual stock. It was very frustrating to me to hold a great stock and have the market go down and so my stock goes down. If you notice Thursday I made a trade on one such example. APA which I consider to be dollar for dollar the best Oil play out there. Oil hit an all time high and the company share price took a dive of $4.00 a share. Yes it recovered to set a new high the next day. But that is my point. It is more important to understand what moves them.

BSC has 28 days to find a buyer, because at this point there is no way faith will be restored in the company without outside cash. Not only is the American consumer leveraged to historical Highs so is the financial system. Banks leveraging 14 to 1 is one thing. But this derivatives market that is worth a total of over 500 trillion dollars is a bubble of historic proportions. There has never been nor will there ever be again a bubble as large as this one. I really have no idea what a trillion is let alone 150 of them. In 2002 the derivative market was 90 trillion and what we see today is a monster so big it casts a shadow on everything else. Our GDP of America is not even 15 trillion. The sub-prime problem has cost us 280 billion so far. That is less than .2% of the derivative market. I believe the whole stock market is 67 trillion. My point is this, we are in for more pain and as Buffet put it we will soon find out who is flying naked in the derivatives market. Like me buying options without the underlying stock, that is flying naked.

BSC and JP morgan shorted the lower tiers of the CDO's and kept the upper tiers. Well they had record profits when the lower tiers failed until it all failed. Then they were wiped out because they were overleveraged. Some hedge funds who leveraged and hedged correctly actualy made money.

Until all the unbacked securities are flushed out, no one has any idea how big this is. Credit default swaps is only a small part of the whole situation, which by itself could bring down the system the Monoline insurers. A significant portion of that market is unregulated. Yes most of that 150 trillion is just the opposite side of a trade. One call on one side and put on the other and the book maker gets his profit. Yet as you can see it would only take less than half a percent to send shock waves through the whole economy. That is why I am Mr. Doom and Gloom.

Thanks Danny, I just wanted your take as you go through this trade.

• I was looking at technical data here and a couple of other sites and it was not making sense.
• I quickly looked at the finiancials from what I see there is no reason for the selling on this particular stock other than lack of interest.

1. I looked at the technical side.
2. I am seeing a 50/50 scenerio or undiceded direction. which means this might go sideways or down.
3. I am always on the negative in my outlook.

The thing that I am seeing

• CRNT closed higher than todays open and higher than yesterdays close
• Volume on the daily is heavier on selling than buying, but higher than the previous 5days
• Weekly chart it closed lower than the open
• with more selling than buying.
• Monthly close is lower than the open
• and heavy selling weakening
• The days trading range is smaller but closed higher
• The Put trading has actually increased on this, rather than diminished. If I am reading this correctly. probably out of date.
• the Call trading has also increased. signalling straddles.
• I don't know if this is correct but I am seeing 3.3 days to cover short position.
• Investors are like elephants, they remember, when they lose
• That is the only thing I can see pressing this stock down
• Need to be able to trust Management
• India is not doing well in that department for me
• Isreal is a 50/50 thing for me, I tend to shy away

I would like to see in the following days, as I am sure you would too! is no gap up. but a higher open with higher close and the same for at least next three days or better known as three soldiers.

Since your in the trade it won't matter if it gaps.

Unfortunatly, I am negative, and there is something seriously wrong with all of this. Either popularity is lacking, or the contracts are not as profitable, due to higher commodity prices. I think we will see actually a gap down. I am hoping not for your sake. For the simple reason higher puts, plus selling has outpaced buying in the last five days. plus the open and close are in the middle of yesterdays candle actually a little lower.

I like all the reasons you bought CRNT, You are correct in the way your thinking along with everyone else and that is the only thing that will increase share price.

if someone is selling there stock pile of shares, nothing we can do. Trying to enter a market where Sprint/Nextel has market share is going to be tough. I have had my Sprint contract for six years for my phone. That is a hard market to break into.

Thanks for your Reply once again and good luck I would have bought into this if my tax check was here.

Guys, I appreciate both of your posts.  Snowman has an entirely different style of trading than I do, and his posts are always interesting.  WallStreetKing, your posts are always good because you're good at picking out weaknesses in my picks.   

Apparently, the Tel Aviv (Israeli) market has had some labor difficulties and has closed three hours early for the last few days.  The Israeli market is having trouble, like the rest of the world, and the technology sector has been especially hard hit.  As CRNT is an Israeli based company, this could be part of the problem.  Also, the TK news feed has two new articles that mention CRNT.

(Must be logged into TK to view links.)

Link #1 Talks about the Sprint deal that hurt the entire wireless sector.  There is speculation that the deal may be back on. 

Link #2 Talks about the Tel-Aviv market and how the tech sector was recently hurt. 

Anyways guys, the company has a good history, I've been following them for almost a year, they meet or beat earnings expectations every quarter, there has been no bad news, they are down more than I expected and may fall further, and I'm not sure why.  Overall, I find it difficult to swing trade in the current market.  So picking companies that I've followed for a while seems logical to me.  They make a lot of their market in the overseas market, and the Sprint/Nextel deal may have caused a lot of speculative buying, but it hasn't really affected the companies projected earnings growth. 

Per Motely Fool:

"The situation with Sprint Nextel (NYSE: S) -- which was supposed to be leading a nationwide WiMAX network deployment with Clearwire (Nasdaq: CLWR) -- has become nothing but even more painful. Investors had pinned Ceragon as a significant beneficiary of the build-out because it was providing its IP backhaul solutions. Because they didn't see sugar daddy Intel (Nasdaq: INTC) or even cash-rich Google (Nasdaq: GOOG) throw wads of cash into the WiMAX mix, investors appear to be writing off this opportunity for Ceragon in the near term.

But Ceragon has a very diversified customer base, with much of its revenue coming from international markets. In 2006, for example, roughly 38% of Ceragon's revenue came from Europe, the Middle East, and Africa, while 30% came from Asia Pacific and 26% from North America. With this diversity in global customers like Vodafone (NYSE: VOD), the company projects 25% to 30% revenue growth for 2008.

At its price of about $6.50 per share, Ceragon is trading at only 15.9 times its 2007 diluted GAAP earnings per share. Company management expects net income to increase at a rate even higher than sales in 2008, so assuming that GAAP earnings grow by 30%, Ceragon's forward multiple is an attractive 12.2. Even though dilution from a share offering late last year will eat into EPS somewhat, Ceragon is still priced at a steep discount to its projected growth. "

Anyways, I normally don't take Motley Fool overly seriously, but I agree with them on this one. 

I feel like the stock is undervalued at it's current price.  I thought it was undervalued at $8.  That doesn't mean it wont' fall farther.  There are many reasons that it could be falling, but unless bad news comes out, it looks like this is a good growth small cap trading at a discount.  If talk of the nextel/sprint business ramps back up, we're looking at a large gap up. 

Of course, there's always the chance that I'll be left languishing for months. sigh.  But if that's the way it has to be, then so be it. Good companies, get beat up for a variety of reasons, but I like to think that the market will respect good earnings reports, and CRNT has a history of them, and they've got good fundamentals.  So even if I have to go long, I think I'll be ok.

thanks for the input guys.  WSK, your CRNT analysis was very helpful.

The bad news

Isael Economic Slowdown

http://www.haaretz.com/hasen/spages/964697.html

Good news 83% use cell phones, 50+% use computers more than the US.

Another article states The 08 Budget for the treasury

http://www.globes.co.il/serveen/globes/docview.asp?did=1000321724&fid=1725