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Technology Stocks : Newbridge Networks

NN 12.73

+1.0%

Nov 18 3:59 PM EST

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To: fumble who wrote (13378)	9/18/1999 8:43:00 PM
From: pat mudge	Read Replies (2) of 18016

Tellabs seems to be focused in older technology, but they have a much higher P/E than NN. In theory then, an investment in NN should do better over the next year than one in Tellabs. If the comparison were only P/E, then your reasoning would be sound. And of course you'd have to take it even further and find a company more depressed. Not too smart, so let's look at the two companies's technologies apart from P/E levels. Historically they've been a PBX vendor, but after losing the Ciena deal, they developed a metropolitan area network DWDM and more recently purchased NetCore, a developer of gigabit routers. Netcore's Everest switch supports both IP and ATM but is limited to 4 OC-48s. And if they want to support more connections they have to be interconnected the same as Cisco's GSR 12000 or Juniper's M40. I'm told this is extremely inefficient and difficult to manage --- and doesn't meet C/O standards. I also understand it's more an edge device than core. techweb.com telecommagazine.com One person in the industry has suggested Tellabs should buy NN. Since I don't know much about Tellabs, I don't know if they're a good fit or not. Back to you --- Pat

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