There has been much talk (possibly complaining) about Harmonic's management and efficiency/effectiveness. I respectfully submit that thus far it is nearly impossible to properly value Harmonic stock based upon its past or even current performance. The real issue it seems to me is how do you value a company (on a long term basis) when its cutting edge solutions are so unique and difficult to understand not only in technological (engineering) terms but in terms of (economic) market potential. Exactly what is Harmonic's long term plan and what is that economic potential? To answer that question I decided to evaluate Harmonic's competition to see how they see the future. After visiting the Ericsson website, it became clear that Harmonic is truly doing what it has been telling us - i.e., piecing together an end-to-end solution for all types of video networks.

To stay in this stock, you need a strong stomach and a level of confidence in management that they can succeed in the long-term venture of developing that end-to-end solution. You see Harmonic is using its R&D department very uniquely. It is acquiring the key pieces of technology and then using its R&D department to glue and bind all of the pieces together. When that "anytime, anywhere video" solution is completed, I believe that Harmonic will achieve market values far in excess of today's values. This stock is a long term play (a buy and hold stock) and not that type of security that you can safely play from day to day.

To better understand this end game, I recommend viewing the video on the following Ericsson website:

http://www.ericsson.com/campaign/televis...