Based on the aggregated intelligence of 145,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, interconnection services specialist Neutral Tandem (Nasdaq: TNDM ) , which provides services that connect phone networks between providers, has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Neutral Tandem's business and see what CAPS investors are saying about the stock right now.
Neutral Tandem facts
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Headquarters (Founded)
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Chicago (2001)
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Market Cap
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$690 million
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Industry
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Diversified telecommunications services
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Trailing-12-Month Revenue
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$159 million
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Management
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Founder/Chairman James Hynes
CEO Rian Wren
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Return on Capital (Average, Past 3 Years)
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17.6%
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Compound Annual Revenue and Net Income Growth (Over Past 3 Years)
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49.5% and 86.3%
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Cash / Debt
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$176 million / $0.7 million
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Competitors
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Verizon Communications (NYSE: VZ )
AT&T (NYSE: T )
Qwest Communications (NYSE: Q )
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CAPS Members Bullish on TNDM Also Bullish on
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Apple (Nasdaq: AAPL )
Activision Blizzard (Nasdaq: ATVI )
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CAPS Members Bearish on TNDM Also Bearish on
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Estee Lauder (NYSE: EL )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 96.2% of the 340 members who have rated Neutral Tandem believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars mcollin and stan8331, both of whom are ranked in the top 10% of our community.
Just last week, mcollin noted that Neutral Tandem "has an enviable position in the industry and competition should not pose a huge risk." Our CAPS All-Star concludes: "As more and more people get smart phones, and as more and more information is transferred via cell-phones (which is clearly the trend), this company stands to profit handsomely."
In an earlier pitch, stan8331 voiced a similar position. Here's an excerpt:
As more and more home voice traffic gets transferred to [voice over Internet protocol] over time, Neutral Tandem stands to profit. And because of the network effect ... those profits are likely to accelerate at a continually increasing rate, making it difficult for smaller competitors to catch up.
One of the best aspects of [Neutral Tandem's] business model, though, is that they stand to profit just as much if people eliminate their land lines altogether and go strictly wireless. ... With no debt and steady, recession-resistant income streams, [Neutral Tandem] should be able to weather whatever new economic storms await us. And when the economy does turn strongly back toward the upside, the company stands to benefit greatly.
What do you think about Neutral Tandem, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!
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