Why Mitel Networks Corporation Popped

Is this meaningful or just another movement?

May 8, 2014 at 11:31AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of business communications software specialist Mitel Networks Corporation (NASDAQ:MITL) surged 11% today after its quarterly results and outlook topped Wall Street expectations.

So what: The stock has surged over the past year on better-than-expected growth, and today's Q1 results -- adjusted EPS of $0.22 on a revenue increase of 69% -- coupled with upbeat guidance only reinforce that trend. While Mitel's recent acquisition of Aastra Technologies contributed to most of that top-line increase, recurring cloud revenue seats spiked 73% over the year-ago period, giving analysts plenty of good vibes over the combined company's competitive position going forward.

Now what: Management now sees Q2 revenue of $278 million to $293 million, well above the average analyst estimate of $200.4 million. "We are pleased with our execution in our first completed quarter post the Aastra acquisition," said CFO Steve Spooner. "The team is meeting or beating their integration timelines and initial synergy targets, and we expect this to translate into improved operational performance and enhanced shareholder value. We also strengthened our capital structure with the successful refinancing of our credit facilities at attractive rates." Of course, when you couple Mitel's still-hefty debt load with its red-hot stock price -- now up a whopping 230% over its 52-week lows -- I'd wait for a much wider margin of safety before buying into that bull talk. 

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Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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