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Technology Stocks : Stratex Networks, Inc. (STXN)
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To: Rob Preuss who wrote (705)6/23/1999 3:37:00 PM
From: Rob Preuss  Read Replies (1) of 1762
 
This was posted on Yahoo at 12:08P today...

>From I-Watch (Early This Morning)
>
> 23-Jun-99 09:59:38 Three separate research firms issued upbeat notes on Digital Microwave this
> morning, noting that the stock's 20% drop on Tuesday represents a significant buying opportunity.
> Yesterday's slide comes on the heels of an earnings estimate reduction from PaineWebber, who also
> dropped its price target to $11 from $12. Investors remain cautious sending the stock up a modest
> $1/2 to $11 1/4. Block trading is brisk this morning with approximately 65% of the total volume
> stemming from block trades. DMIC has traded almost 900K in the first 20 minutes of the session
> while its average daily volume is below 700K. Thomson I-Watch data shows that there are a few
> institutional brokers advertising for blocks at prices at and below $11 1/4. While these investors
> are offering the stock some modest support in the low $ll's, they do not appear to be very
> aggressive. Any attempt at a rally will have to overcome significant resistance as the effects
> of PaineWebber's negative report linger. -End

I just spoke with Jeanne Condren of DMIC's IR.

+ Jeanne noted they are in their quiet period now.
+ Jeanne confirmed the PaineWebber analyst's report.
+ Jeanne noted that management guidance to analysts
has not changed at all at any time during the quarter;
she confirmed this with Chuck Kissner and Carl Thompson.
+ Jeanne referred to three other analyst reports (see above)
out this morning stating that this drop represents a
significant buying opportunity. These firms are:
- Cowen & Co (Morning Report + Analyst Report)
- Dane Raschaur <sp?>
- Needham & Co (Morning Report + Analyst Report)
The latter report maintains a buy rating with a 6-12 month
price target of $18/sh and an FY01 EPS estimate of $0.59/sh.
+ Jeanne stated that their quarterly earnings report will
be released on 14 July after the close (about 4:30P ET).

Also posted on Yahoo at 12:29P today...

>...the report from Paine Webber analyst Walter Piecyk from 6/22
> here is partial text:
>
>> We recently met with Chuck Kissner(CEO) AND Carl Thomsen(CFO) OF Digital Microwave.
>> We are reducing estimates due to a slower than expected recovery in the microwave radio industry.
>
> We have not yet seen a recovery in the microwave radio industry and are reducing our estimates
> on P-Com and Digital Microwave,as both companies are experiencing slower than expected ramp up
> in sales.Following a difficult 1998,we had anticipated a more robust industry growth rate to help
> ramp up the company's sales,which has yet to materialize.Having doubled in price since the
> beginning of the calender year,shares of DMIC are trading at 30x our fiscal 2001 EPS estimates.
> We will revisit our rating once the stock price declines 25-30 % or until we see greater
> visibility on Digital Microwave's and the industry's revenue growth.
>

Its worth noting that we've seen huge volume again today
as buyers have jumped in to grab the opportunity created
by this PaineWebber analyst. I think these buyers will
represent a stronger base of stockholders who are looking
for a price rise into the $18-20 range (or beyond).

The downside risk seems small from here; the upside potential
seems pretty good. So it looks to me like its time to buy.

Rob
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