The real issue is DEMAND. The million dollar question is what the SUSTAINABLE, NORMAL demand for networking equipment will be in the forseeable future. If this translates to $20 billion + for NT, they will be fine. If this continues to slip down to $10 billion, NT may not make it due to short-term financing issues.
IF NT survives in the short-term (next year or so), NT will do fine and their stock price will go back up to $20+ due to their strong position in products in the two hot networking sector (optical, wireless).
I think it is highly unlikely NT will be "allowed" to go under due to their significance to the high-tech industry in Canada and due to the depth/breath of their technology/product portfolio.
So in that light, the current price is probably a good bet for any investors who do not think that Telcos will go out of business any time soon and that the IP revolution will slow down to a crawl.
I have been out of NT for about a year and half now (if my memory serves me correctly) and am evaluating carefully for my re-entry point.
Having said all that, i want to see the Telco stocks stabilize (Qwest, Worldcom, BT, Dutche Telecom, France Telecom, C&W, Verizon, Vodafone, etc.etc.) before getting too heavily back into the networking sector. Until the Carriers finances are under control and they see some light at the end of the tunnel, i don't see the CAPEX coming back to the "normal" level (whatever that normal level is.....) |
