Over on the smartmoney website, there is an interview with Brian Hayward who runs the very successful Invesco Worldwide Communications fund. And guess what - he likes Viatel alot. VYTL is one of four highlighted stocks in the interview. Very bullish. Here's a piece of the article on VYTL.
Finally, there's Viatel, a "noncore" holding of Invesco Worldwide Communications. For Hayward, this company has the potential to be a market leader, but isn't one just yet. Viatel is one of a half-dozen in the race to wire Europe with a fiber network as deregulation of incumbent monopolies takes effect. Its stock is up 114.2% this year. Hayward bought Viatel at $13 per share when it was undervalued relative to its competitors. Since the first of five of its network "rings" was lit earlier this year (in other words, up and running), its stock has risen to $46.25 a share.
"The revenue growth is going to be really big this year," says analyst Thomas Morabito of Scott & Stringfellow. "Each time a ring is completed, it's an automatic boost to the stock." Morabito also notes
that Viatel has a contract with Teleglobe (TGO) to use its fiber network, which "really validates what they are doing. Anytime you see blue-chip customers, it's a good sign."
While Viatel is $1.2 billion in debt, Morabito thinks the demand for fiber networks will continue to outrun the supply in the European market, especially with the increased demand for streaming video, which requires massive amounts of fiber bandwidth. Plus, the company will be able to bankroll its plan for wiring 42 leading European cities with this week's secondary stock offering. As Viatel grows with each ring lighting, it will also become an attractive candidate for acquisition -- if it doesn't get too big.(Revenue is expected to increase by 123% this year and another 78% by 2001.) Says Morabito:
"There's a lot of companies that want a presence in Europe."
Entire article is at:
smartmoney.com |
