<< If a company is going to see margins squeezed because of these macro issues you describe I would much rather be holding NN than a CSCO or LU. >>
Why? Margin squeeze likely won't be uniform across all product lines. LU and CSCO are more diversified; they stand to weather pressures in individual product categories more ably.
For better or worse we're now in the era of "bigger is better". T, WCOM, CSCO, LU, MSFT, et al. occupy a lot of space and what they don't yet occupy they can enter quickly (e.g. CSCO's acquisition of Cerent) with their deep pockets. Being "best in class" just isn't enough anymore (R.I.P. Lotus 1-2-3, WordPerfect, Borland, Banyan); breadth of product line, unified customer support, and cross-line synergies are big selling points now, as well as having a single global sales organization. Even if NN was hitting on all cylinders I thinks they would have a hard road ahead. |
