After years of quietly cranking out communications gear in Charlottesville, Comdial Corp. started raising its profile last month with its first advertising campaign in general business publications instead of trade magazines.
Somebody has noticed. For the past week Comdial stock has been trading at five to six times its usual volume, and this week it hit its highest level since January. The share price jumped more than 30 percent--from $6.50 on Aug. 23 to $8.50 on Tuesday--
then pulled back to $7.93 3/4 yesterday, down 56 1/4 cents on volume of 79,100 shares.
Comdial makes stuff that most people never see--
hardware and software to run communications systems for small to medium-size businesses. Comdial equipment can hook the phones in hotel rooms to the front desk and reservation systems and even keep track of which rooms housekeeping has finished.
The stock is low-profile as well, followed regularly only by one analyst at the Pennsylvania Merchant Group.
But Comdial's director of investor relations, Cass English, said company officials have been meeting with brokers, traders, institutional investors and analysts recently, and that the firm is touting its wares to a broader audience for the first time with ads in Business Week.
Those outreach efforts are probably part of the reason the stock has been more active, she said. Another factor, English added, is that one of Comdial's oldest and once-largest shareholders, the Pacificorp Foundation of Portland, has completed a sale of 275,000 Comdial shares. Uncertainty about when the bloc would be sold had depressed the price of Comdial stock.
A public company since 1978, Comdial has grown into a comfortable competitor in its niche, generating sales of $35.7 million in the second quarter of this year, up 14 percent from a year ago. For the quarter, it earned $2.1 million (24 cents a share), down from $2.2 million (25 cents) a year ago.
Comdial's bottom line has been hurt this year by a transition many regional technology firms can only dream of: It has used up the tax credits accumulated during its years of start-up losses and is paying taxes at the full federal rate.
Though it has yet to be dubbed an "Internet stock," Comdial began moving into Net-based systems last year by acquiring Array Telecom Corp., a Toronto company that has developed equipment for making telephone calls over the Net.
To signal its entry into the Internet community, Comdial moved Array's operations to Herndon this summer.
CAPTION: (This graphic was not available) Comdial