You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
As wireless telephone operators accelerate their spending to provide new services to consumers, Comverse Technology (symbol CMVT) should be a prime beneficiary. The firm is already the global leader in voice mail, with roughly half the world's market. But the real excitement will come from more-sophisticated new products, says Morningstar analyst John Slack, who recommends buying the stock.
Carriers, eager to raise average revenues per cell-phone user, are increasing their offerings in such areas as text messaging and video-based, multimedia messaging. Comverse "is looking to extend its leadership to newer, high-growth applications for wireless carriers," Slack says.
After losing money in 2002 and 2003, Comverse returned to profitability in 2004 and has been growing nicely since. "Comverse is positioned in one of the most attractive segments of the wireless market," Slack says. He expects more evidence of that when the company releases fourth-quarter results on March 15.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The main risk to the company: Nokia and Ericsson, two of the largest cell-phone makers, are bundling messaging software in their equipment. But Slack says Comverse's technology is superior, and wireless companies are willing to pay premium prices for it.
In addition to its core business, Comverse has a fast-growing subsidiary, Verint Systems, that provides digital audio and video surveillance and security systems to government and business clients. Verint already represents 25% of the firm's revenues, which analysts figure totaled $1.2 billion in the fiscal year that ended January 31.
Because Comverse's earnings are depressed, the stock looks expensive. It sells at 35 times estimated earnings of 83 cents a share for the year ending January 2007 (up from 62 cents expected for the January 2006 year). Comverse also sells at a fairly high five times sales. On the plus side, Slack says he expects the company's net profit margins -- now 11% -- to rise. He also notes that Comverse has nearly $8.50 a share in cash.
--Steven Goldberg
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
Ask the Tax Editor: Federal Income Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on federal income tax deductions
-
States With No-Fault Car Insurance Laws (and How No-Fault Car Insurance Works)A breakdown of the confusing rules around no-fault car insurance in every state where it exists.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
How the Stock Market Performed in the First Year of Trump's Second TermSix months after President Donald Trump's inauguration, take a look at how the stock market has performed.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
