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July 7, 2006 Stock Pick: Andrew Corporation (ANDW)

Stock Price: $8.76

Andrew Corporation designs, manufactures, and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries.

ANDW improved revenue from $1.014 million in 2003 to $1.838 million in 2004 to $1.961 million in 2005. Profit improved from $15.52 million to $32.98 million to $38.85 million. ANDW is currently trading at an undervalued market cap of $1.40 billion and a price to sales of only 0.7 compared to the industry average of 4.0.

ANDW is near its 52-week low of $8.68 with strong support at its current level. ANDW is trading below its book value of $9.76. The company has $188.78 million in cash on the balance sheet and assets exceed liablities by over 3 to 1.

ADC is planning to buy ANDW for $1.6 billion, a 14.2% premium over ANDW's current market worth. ADC would be buying ANDW for just above book value. We believe ANDW is worth more than this. We expect shareholders of ANDW to push for a higher premium over the market price or they won't approve the deal.

ANDW is a solid buy for a sure gain.

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