As far as its recent chart performance in concerned, Aviat Networks, Inc. (NASDAQ:AVNW) is by no means among the hottest stocks in the communication equipment industry. However, the company’s historical market record suggests that a return to form is a prospect investors should not rule out.
Although AVNW stock is currently traded around $1.80 per share, investors used to buy and sell it above the $5.00 benchmark only a couple of months ago. As you can see on the accompanying 12-month chart, AVNW has been in a downward spiral for a whole year now showing no signs of bucking the trend any time soon. That is why, what follows next is quite good a question.
Needless to say, the company’s market potential in 2012 will be largely dependent upon the management’s ability to improve AVNW’s net financial results, as well as the long-term economic viability of its business operations.
A short glance at the financial reports of Aviat Networks, Inc. shows that while the company has realized huge working capital surpluses over the last ten years or so, its business has been anything but highly profitable. What is more, AVNW has been incurring losses since 2002 and it lost an additional $58 million during the fiscal year ended Jul. 1, 2011.
Nevertheless, there are indications that AVNW could still end up being a commercially viable investment for market players. Occupying the communication equipment industry, the company is a legitimate provider of wireless transmissions solutions worldwide. Firthermore, AVNW announced last week it had acquired not only the ISO 9001:2008 certificate, but also the TL 9000, i.e the highest telecommunications industry quality standard for telecom products, services and solutions. The certificates, which are valid for three years, will be serving as a guarantee that AVNW has the right (and capacity) to provide its customers with a wide variety of high-quality solutions.
The quality certification mentioned above will, other things being equal, at least improve the company’s reputation among its current customers in the short term, which in turn could expand its customer base as a whole in the long run. That is why, as we already mentioned, a return to form for AVNW stands a not-so-bad chance of becoming a reality.