Raptor Networks Technology (RPTN.OB)
Dear Bottarelli Research Member,
This week I am putting out a buy now or say “goodbye” on one of my favorite little gems. I cannot emphasize enough how important this company and their products are going to be, but I do know that the stock will start to climb as the coverage from the “herd” comes in. Folks, buy Raptor Networks (RPTN.OB) under $1.10 while you still can. Now here’s Bryan with the specifics on this little dynamo.
Sincerely,
“Capturing Just a 5% Share of Their Smallest Market Segment Would Grow Raptor Into a +$500M Business”
When I began my research on Raptor Networks, I liked the fact that they were a high-potential, early-stage company. Their quarterly revenue growth (year over year) had increased 742.90% and their technology was winning awards for “Best Switching Solution of the Year” for ease of use, cost, and overall performance.
What Raptor Networks does isn’t exciting, per say, but they are a fast-growing company that could steal a tremendous amount of market share from heavyweights like Cisco Systems (CSCO – NASDAQ) or Juniper Networks (JNPR – NASDAQ).
In short, Raptor Networks designs, produces, and sells switching technologies for inter-networking systems. In other words, they make those black stackable machines that are stored in the basement of the world’s major corporations that keep the most intricate computer network equipment running.
What differentiates them is their high performance 1-Gigabit and 10-Gigabit ethernet switches that allow elements from any network to be geographically distributed near the users or devices they serve. In other words, Raptor’s ethernet switching is what the PC was to mainframe computing. To their customers, that means 100 times the speed of conventional switches at about one-third the price.
Their proprietary switch clustering technology called Raptor Adaptive Switch Technology (RAST for short) offers the industry’s only capability to distribute switches up to 10km apart, yet have them behave and appear as one logical switch. As the switching market evolves, this technology will be what network administrators and mainframe technicians demand to run their systems – and RPTN is beautifully positioned to serve this evolution.
Without getting too technical, let me quickly run down the components that make up Raptor Networks’ business model and their forecasted market growth over the next few years. I think you’ll quickly see the potential of this small and growing firm.
Telephony: While VoIP is gaining market acceptance, most networks must be upgraded to handle any technology advances. Raptor’s switches can be cost-effectively incorporated into legacy networks to facilitate any upgrades. This market grew from $1.73 billion in 2003 to $3.82 billion in 2006.
Storage: IP storage is the fastest growing area of the storage world, and Raptor’s Ether-Raptor is the only current ethernet switching solution that affordably meets most company’s requirements. What’s more, as aging Fiber Distributed Data Interface (FDDI) networks become obsolete, Raptor Networks’ Ether-Raptor product offers a powerful and cost effective replacement. This market grew from $2.4 billion in 2002 to $7.1 billion in 2006. But the largest growth potential comes from small-to-medium businesses that seek high performance at an affordable price. As a smaller, leaner competitor, Raptor can provide these systems at a fraction of the price of the larger companies. Over the next 3 years, this market grew from $2.1 billion to $18 billion.
Add it all up, and the total market for Raptor’s switches exceeds $20 billion per year. And trust me, it doesn’t take a big up-tick in sales for this stock to move a lot higher. In fact, every 1% of new market penetration equates to $200 million in annual revenue. Since Raptor Networks currently supports a Market Cap of 76.97 million with positive cash flow of $4.75 million per quarter, a 5% share capture of even the smallest segment would grow Raptor into a +$500 million business. And that could increase shares 10 to 1. Based on that potential, let’s add shares of Raptor Networks (RPTN.OB) to our portfolio.
PLAY: Buy shares of Raptor Networks (RPTN.OB) at or under $1.00, good for the week.
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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