Ascend back on Briefings favorite list.
Brief: Cisco among stocks listed as a favorite in Barron's Big Money Poll... Stock moved
to within a fraction of recent high, also very close to Briefing target of 86-90... Bay,
Newbridge and 3Com also posted strong gains in Monday's recovery rally... Smith
Barney reiterated its buy ratings on 3Com and Ascend, with 12 to 18-month price targets
of 73 and 47, respectively... Separately, ASND announced that it sees 10% sequential
growth over the next several quarters... Expects price cuts in concentrators of 20%-30%.
Components:Ascend Communications (ASND), Bay Networks (BAY), Cabletron
Systems (CS), Cisco Systems (CSCO), Fore Systems (FORE), Newbridge Networks
(NN), Shiva Corp. (SHVA), ThreeCom Corp (COMS), Vanstar Corp. (VST), Xircom
(XIRC)
Our Favorites:
ASND
Market ignoring company's improved fundamental outlook and focusing on recent
problems... Not surprising given bearish tone but does create an opportunity... That said,
stock now at critical support... Needs to bounce soon... But tax considerations could keep
stock from staging strong recovery until some time next year... First resistance at 38-40.
CS
Stock broke to low end of trading range... But risk/reward ratio very promising given
deflated valuations... Stock now at 13.8x estimated earnings... Resistances are at 35 and
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