RESEARCH ALERT-UBS Warburg starts small telecoms
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NEW YORK, April 3 (Reuters) - UBS Warburg said analyst Glen
Waldorf initiated coverage of emerging local telecommunications
companies and highlighted McLeodUSA Inc. and Time
Warner Telecom Inc. with strong buy ratings.
UBS Warburg said Waldorf is its new emerging telecoms
analyst. He launched his own coverage of the sector, and set
new ratings or forecasts for some stocks previously covered by
the firm.
McLeodUSA was Waldorf's top pick in the CLEC (competitive
local exchange carrier) market. McLeodUSA "is a defensive,
growth and cash flow story with unique competitive profile,"
Waldorf said in a research report.
Time Warner Telecom was also cited as a top pick because it
has shown strong execution of its business plan, it's
fully-funded and has a strong balance sheet, the report said.
Waldorf also assumed coverage of Allegiance Telecom Inc.
He lowered the rating to buy from the strong buy
rating the firm previous had.
UBS Warburg said Allegiance is fully funded and has a
strong balance sheet, but it is "several quarters" from posting
positive EBITDA (earnings before interest, taxes, depreciation
and amortization).
Waldorf also assumed coverage of Choice One Communications
Inc. , maintaining a buy rating on the stock and
setting a $12 price target. He called Choice One a "growing
regional smart build CLEC with solid results to date and
underlevered balance sheet."
He started coverage of Mpower Communications Corp.
and cut the rating to hold from buy and set a $5 price target.
Mpower is "improving execution, gaining marketshare, and slowly
restoring credibility," Waldorf said.
Pac-West Telecomm Inc.'s rating was lowered to
hold from buy, and got a $5 price target, since various
regulatory issues overshadow the stock, Waldorf said.
He cut WinStar Communications Inc.'s rating to
hold from strong buy and set a $1 price target. WinStar's
"operational momentum will be insufficient to overcome debt
burden and capital structure," Waldorf said.
XO Communications Inc.'s rating dropped to hold
from strong buy, the firm said. XO is an "ambitious
international CLEC with strong management with rapid cash burn
and debt load that represent significant risks," Waldorf said.
He set a $9 price target.
Universal Access Inc. was started with a buy
rating and $17 price target.
In afternoon trading -- amid a crash in CLEC issues --
McLeodUSA fell $1-13/16 to $6-1/16, Time Warner Telecom $6-3/4
to $29-3/16, Allegiance $2-3/4 to $9-1/2, Choice One 15/32 to
$4-11/16, Mpower 1/2 to $1-5/8, Pac-West 10/16 to $2-3/16,
WinStar 17/32 to 11/32, XO 2-7/32 to $3.00 and Universal Access
5 cents to $5.05 a share.
REUTERS
Rtr 16:25 04-03-01
Copyright 2001, Reuters News Service |
