Trend Setters and Range Riders Message Board

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Strategies & Market Trends : Trend Setters and Range Riders

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To: SusieQ1065 who wrote (4839)	5/5/2001 2:04:09 PM
From: Frederick Langford	Read Replies (1) of 5732

Briefing does a Stock Brief on GLW: Trader's Edge: Corning Inc (GLW) The chase is on... The precipitous advance in the Nasdaq over the past several weeks has left many investors sitting on a pile of cash. Investors are now scrambling to find sound investment ideas, fearful that the Nasdaq will resume a bull advance without them onboard. A perusal of the fundamentals of the best and brightest reveals that the vast majority have already become disconnected from their fundamentals. You will be happy to discover that there are a few that still fall into the value category. Trading Points What is there to like about a market that has already run more than 35% in a little less than a month, and where valuations have already returned to bubble levels? Longs have a couple of things in their favor: a) investors continue to place significant bets on the bear side that this advance falls on its face and lows are retested; b) the mountain of cash, which Mario Bartiromo incessantly reminds us is building on the sidelines, is finally feeling bold enough to move back into the market. We feel that the intelligent way to reenter this market as an investor is to decide which stocks mutual funds view as "must-owns." To meet this criterion a company must be the number one or two player in its space; carry a multiple that is not at a significant premium to its growth rate; and possess a management team that Wall Street feels it can believe when earnings guidance is given. This analyst thinks that Corning (GLW 23.61) fits the bill. This leading provider of optical components to the telecom industry has seen 18 months worth of share price gains go up in smoke as investors were beaten out of the market by serial earnings warnings from the tech sector and eventual capitulation by overexposed mutual funds... We now find the stock trading 30% off its 52-week low of $18.19 reached April 3rd. Corning has guided down estimates twice over the past two months. Recent string of lowered guidance has pulled down the consensus numbers for 2001 and 2002 to $1.01 and $1.20 per share, yielding earnings multiples of 23.5 and 20.0, respectively... Given that sector leaders such as Cisco and JDS Uniphase have already reinflated to forward multiples of 66 and 68, respectively, Corning presents itself as a legitimate bargain. More compelling is that while these companies are projected to show negative earnings growth in 2002, GLW is still expected to grow EPS at respectable clip of 19%.

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