Market Insight: Wind River Systems Riding Good Earnings Momentum
July 17, 2008
Wind River Systems (WIND) offers device software optimization solutions. The company’s software and development tools are used to optimize the functionality of devices, such as digital imaging products, set-top boxes, automobile braking and navigation systems; and avionics control panels, factory automation equipment, Internet routers, mobile handsets, and coronary pacemakers.
It primarily offers Wind River platforms, which comprise VxWorks or Linux open-source software operating systems; Workbench, an integrated development suite for designing, developing, debugging, and testing device software that supports VxWorks and Linux operating systems, and a range of processor architectures; and market-specific middleware, which provides the networking, security, mobility, wireless, and management protocols. Wind River markets its products and services in North America, Europe, Middle East and Africa, Japan, and the Asia Pacific region primarily through its direct sales force.
The company also licenses distributors internationally to serve customers in regions not serviced by its direct sales force. In addition, Wind River Systems provides a range of hardware-assisted debugging tools and hardware reference designs that enable customers to incorporate into their products or use in the development/prototype stage. It serves customers in aerospace and defense, telecommunications, automotive devices, and consumer devices markets. Wind River Systems was founded in 1981 and is headquartered in Alameda, California.
Wind River Systems is strong fundamentally and is exhibiting terrific earnings momentum.
Revenues for the first quarter of fiscal 2009 were $87.9 million, compared with $78.0 million reported in the first quarter of fiscal 2008, an increase of 13 percent. Net income for the first quarter of fiscal 2009 was $0.3 million, compared to a net loss of $(4.6) million in the first quarter a year ago.
Technically the stock has a good profile, projecting a possible move up to the $14 per share area over the next couple of months. Wind River Systems does have a tradable options market that also provides LEAPS to allow the trader to play this over the long-term, if so desired.
Figure 1: Elliott Wave-4 Buy Pattern for Wind River Systems
(Source: Profit Source)
Happy Trading.
Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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