Saturday, September 10, 2005

Can You See Me Now? Radvision Coverage Initiated

Radvision (RVSN) specializes in video conferencing services and equipment.

Ya, so what?

Well, they just struck a deal with the Pentagon and we feel plenty more are on the way.

The Pentagon is revamping its networking systems and they need RVSN to coordinate all their communications and IT efforts in Iraq.

Sounds good so far, right?

Only a handful of analysts have coverage on the stock, partly because RVSN has been a publicly traded company for only 5 years.

That we love, too.

One of the metrics we use to isolate small cap growth plays is determining how long the company has been trading on an exchange.

We prefer companies that are just beginning to find their niche as they break into potentially explosive and underserved markets.

Big -- and I mean big -- winners in the history of the stock market have come from nascent companies just like RVSN.

Remember Taser International, the stun gun makers from Arizona?

All it took was some coverage, some analyst upgrades, and some extra contracts to send TASR on a relentless tear all throughout 2003.

Once analysts figure out who Radvision is, RVSN will get some much deserved facetime.

We see revenues hitting $70 million next year and $100 million in 2007.

RVSN is small but profitable and they have money in the bank for a rainy day.

While we think the company's fair value is not too far from where it is currently trading, we have absolutely no qualms telling you that because of RVSN's thin float, even the faintest of news could pop the share price higher.

As such, we're initiating coverage on Radvision with a Buy Rating and a $21 price target inside the next 8-12 months.

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