Again, I am talking as a long term investment and not hour by hour trading. There are a bunch of marco and micro factors that are going to benefit UT going forward.
US growth is slowing to almost 0. UT exposure to the US markets is mainly via the PCD. Handsets are still projecting to do very well in the coming years. With a slowing US economy and recession, UT should actually benefit because they are at the low end. Surprisingly, a majority of their handsets is internally made (this will fluctuate but it is now significant).
US telecom infra spending is stagnant,international expanding. UT has no exposure and operates in the high growth markets in China/India. India looks to be doing exceptional increasing to 70% revs to $100m in one article early in the year to now $150m and set to grow significantly more in the future (latest article) to be 10% of overall revenues. BTW, if they sell PCD, this percentage jumps to 20%!.
IPTV worldwide expansion.- China and India will be leading the expansion. UT also has 42 to 45 trials outside of China/India. There has been a lot of difficulty in just getting the regulators to agree and to battle cable companies but the last 2-3 years of trials, testing, getting regulations, programming, etc are starting to pay off.
Demand for UT stock- One word...Shorts- They will be our biggest ally. Unless it goes BK, they will have to buy it back. Any price increase will be aided by shorts and any price decrease will be supported by shorts. No doubt the shorts hurt during this 3 year downturn but this will have to be unwind. Funds that wanted to unwind have probably done so already. Retail longs have basically given up for the most part. We surviving longs are either stupid, stubborn, dillusioned, whatever but we are staying for the longer term (for better or worse).
UT internal controls/previous financials - This has been a SIGNIFICANT issue for the last 2-3 years. Make no mistake that a lot of shorts and funds look at this and is a major reason the shorts do not cover or funds not buying. Barton was very candid on this apologizing for the delays, etc. but basically saying most of the problems happened BEFORE his watch. I have not been a supporter of Barton but he has come out and mentioned the investigations are over and filings in October. This is a monumental event, I believe. Sure, you can say they will delay, etc but Barton has never promised a timeframe before the last CC, even mentioning at the end of the call to hang in for just a little longer. Wall St. is all about glimming some hints etc. I think this thing is about as good as done.
Relative market valuation/stock price- This is what most touch upon as why its a buy but it does have a lot to do with why its safe NOW compared to when it was $10. It also has to do with the other stocks competing for investments. When other companies are doing well and UT has all these issues, obviously money flows to those companies. I think this is about to change. The market has been moving money from real estate (actual properties) and stocks in real estate, home builders, financials into other groups like energy and tech. Not all tech-see Alcatel/LU for ex but for the most part a lot of money has flowed to these stocks pushing their valuations higher and higher. All UT needs the market to stabilize, and divert some money to more "valuation" type plays. UT is also down 60% this year alone so...
Thats basically why I think its safe investment going forward