Telular: A Value And Dividend Growth Story In The Making


INTRODUCTION:

Telular (WRLS) released its fourth quarter and fiscal year results on Tuesday, November 6. Management not only exceeded our expectations but raised forward guidance and increased the dividend nine percent. The yield exceeds 4% at the time of this writing.

We have been writing about Telular on SA since August 2010 when the stock was at $2.31. The stock closed at $10.97 at the time of this writing and is a compelling story going forward based on recent results and company guidance.

The goal of this discussion is to give the reader a basic understanding of Telular, a growth and high yield company not widely followed by analysts. The discussion includes:

  • A brief history of the transformation that has led to today’s success.
  • A brief overview of each business segment.
  • Dividend growth and expectations
  • Financial trends
  • Valuation
  • Risk
  • Conclusion

HISTORY:

Telular has been publicly traded since 1994. The focus from1994 to about 2006 was on FWT’s and FCP’s (Fixed wireless terminals and Fixed cellular phones). The original investment thesis was people would cut the cord and buy a FWT (Fixed wireless terminal) to replace their landlines. Turns out the masses pretty much ignored FWTs, sending the stock nowhere. The longtime CEO was replaced in 2005 and the CFO in 2007. New management changed the strategic direction of the company, discontinuing the FCP business and phasing out the FWT business. The company transformed itself from one focusing on equipment sales to one focusing on recurring services.

…Click here to read the complete article….

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One Response to Telular: A Value And Dividend Growth Story In The Making

  1. Telular’s CEO annual letter to shareholders share expectations for 2013 top line growth including SkyBitz. Can be viewed at:
    http://bit.ly/10KrsDH

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