No Tech Bubble Here

Written by GSCR Staff   
Wednesday, 05 March 2014 08:23

As we mentioned in yesterday’s Goldman Guide, the tech M&A activity should continue over the next few months and the right stock pick could bring the trader a nice pop. RadiSys Corporation (NASDAQ – RSYS - $4.33) is an up and comer that provides wireless infrastructure solutions for the telecom, aerospace, and defense markets in North America, Europe, the Middle East, and Africa. 

The Company offers advanced telecommunications computing architecture product family that includes a suite of integrated, application ready, and software-rich hardware products, such as carrier blades, chassis, disk modules, line cards, and processing and switch modules for computing/switching, deep packet inspection, digital signal processing, and platform software applications.  It also provides media resource function products comprising multimedia processing platforms for audio and video conferencing, voice over long-term evolution, voice over IP, video over IP, OEM, and enterprise customers, as well as IP multimedia subsystem telecommunication service providers and solution developers.  In addition, the Company offers Computer-on-Module Express products, which are designed for applications that require a standard processor and memory subsystem, and modular flexibility to retain key design-level IP on a separate carrier board; and rack mount servers primarily for medical imaging and diagnostic, test and measurement, and aerospace and defense submarkets.  Further, it provides Trillium software that enables the communication for telecommunications networks, including mobile and fixed line networks. Additionally, the Company offers end-to-end infrastructure solutions to manage and control the data flow within existing and next-generation wireless communications networks, as well as to provide voice, video, and image manipulation capabilities for network providers.

The Company has some awesome deal space in the 3G and 4G space.  Last week RadiSys announced that BTI Wireless, the leader in TD-FEMTO end-to-end solutions providing 3G and 4G Smallcell and Gateway System products, selected Radisys’ Trillium® software for deployment of an advanced LTE-TDD (Long-Term Evolution Time-Division Duplex) solution for China Mobile.  Additionally, the Company announced a deal with Octasic, Inc., a leading provider of devices and technology platforms for wireless base stations and media processing.  RadiSys will provide the integration of Radisys' Trillium® small cell software with its new OCTBTS platforms, including the OCTBTS 3000 -- the smallest full-mobility base station in the world.  Octasic's platforms leverage RadiSys' Femtotality 3G small cell software today, with plans to integrate its LTE TOTALeNodeB™ small cell software.

RadiSys continues to expand its product lines, win awards, and land new deals.  On the micro level RSYS is very bullish in the short, intermediate, and long term Daily Moving Average.  Additionally, the basic valuation puts the forward P/E at just under 13 as the firm is expected to begin operating in the black this year.  Look for a nice rise to the $5.50 level by early 3Q14.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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