FWIW, Cramer's thoughts on the sell-off in vendors to the LD telcos. DITC not mentioned, but point applies:
Remain Calm, Despite Collateral Concerns
By James J. Cramer
Let's just panic on all of these equipment stocks because ICG Communications (ICGX:Nasdaq - news) and WorldCom (WCOM:Nasdaq - news) hit 52-week lows. Let's sell everything: Cisco (CSCO:Nasdaq - news), Nortel (NT:NYSE - news) -- heck, EMC (EMC:NYSE - news), because this downturn is going to kill them.
My heavens, how many times have I heard that siren of despair? How many times have people jettisoned these stocks because of collateral concerns triggered by declines in stocks of potential equipment buyers? Man, is that stupid.
Don't succumb to this kind of worry-mongering. You will just be selling to firms like ours who have seen it all and know that these declines happen periodically, but do not cut spending one whit.
Here's why. These companies may be in the fight of their lives. They may have to cut back on expenses and cut back on advertising and on overhead and overtime, but they can't cut back on equipment spending because, without it, they are just giving up. They might as well put themselves up for sale. Their whole basis for being in business is that they have the latest and the best technology.
Two years ago, during a similar bout of selling (triggered by the closing of the high-yield bond market because of Long Term Capital-related problems), I worried aloud that Nortel would be hurt by the cutbacks and I debated whether Cisco would be hurt, too. The cutbacks never happened. Cisco bottomed in the midst of the worry. Nortel never looked back.
The same will happen again. Please don't flip out. Sure, sell the long-distance companies if you want. They do seem to be in a perennial, unattractive price war. But if you take the next step and cut exposure to the equipment makers, I think you will be very mistaken. These are precisely the kind of short-sighted, short-sold bottoms that are most attractive to those of us always looking for a cheap entry point to buy more of our favorite stocks.
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