Juniper Group, Inc. (OTCBB: JUNP, JUNP message board or JUNP.OB) has recently announced their telecommunications subsidiary has engaged in multiple projects. The news drove the company price up as much as 150% shortly into Wednesday's trading, but it seems the price rush was a one time event and will not intervene with the general downtrend for long.
Juniper's management however expressed confidence in their future work. The announced contract will take 12 to 18 months to complete and so the company should demonstrate increased performance for the time. However, an increase in sales will likely to set down only in the receivables section of the balance sheet, thus meaning the company's financial position won't change too much.
From a technical trader's perspective, the stock has bottomed out in the first half of October and set sail for the recovery. There was actually no event to trigger the turnaround, so the stock just became undervalued based on their historical performance.
Their P/S of 0.67 is way lower than industry's 2.54, and Beta of 0.34 is already a sign of undervalued stock (industry's result is 0.73, so undervaluation is not too large). Other ratios are not applicable cause of company's bumpy performance and constant losses.
Another thing, the recent contract announcement held little details. It only stated "this new work will increase receivables in October to levels higher than those in the preceding months" and "one Client expected to spend close to a billion dollars in pre-4G upgrades in the coming year". The clients aren't specified, Juniper might only get a few thousand out of the mentioned billion, and they will most likely record it only as receivables on their next financial report. The amount is unsure and so this announcement was only good for setting the intraday stock price higher.
User comments