Investment ideas
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1. True value: Strength lurks behind poor valuations
Solid historical performance suggests these equipment stocks may
continue to provide value in 2002
by John Filar Atwood, equity research columnist
You really can't blame investors if they would rather just leave
the telecom equipment industry alone until 2003. This year,
communications equipment shipments fell by 22 percent, the
largest single year drop since the 1950s.
With capital spending budgets getting slashed for 2002, analysts
are forecasting another three percent decline in equipment sales
next year. If that happens, it would be first time ever that
communications equipment sales dropped in two consecutive years.
Investors willing to stick with the industry will have a tough
time singling out companies that can provide value under existing
conditions.
Click here to read more:
thetelecommanalyst.com
2. Outlook 2002: Will price wars scramble wireless?
Investors may have to brace themselves, but service may outpace price
in customers' values
By Dave Sterman, equity research columnist
Who'll be the first to blink? Analysts aren't really focused on
this issue yet, but price wars may be looming in the wireless
sector, scrambling the sector and confounding expectations.
Sprint PCS (PCS), Nextel (NXTL), AT&T Wireless (AWE), Verizon
(VZ), Cingular (a joint venture between BellSouth (BLS) and SBC
(SBC)) and VoiceStream (a unit of Deutsche Telecom (DT)) are
close to completing their respective nationwide expansion plans.
That means that consumers in almost every major metropolitan area
now have at least three or four wireless carriers from which to
choose. And that means it won't be too long before these firms
start scrambling to poach each other's customers.
Unless these carriers can show remarkable restraint, price wars
could soon become the dominant theme in the sector.
Click here to read more:
thetelecommanalyst.com
3. 2002 network outlook: All eyes on Cisco (CSCO)
A plethora of smaller companies are nipping at its heels, but all they
may get is bone
By Dave Sterman, equity research columnist
What do Juniper Networks (JNPR), Foundry Networks (FDRError!
Hyperlink reference not valid.Y), Extreme Networks (EXTR) and
Riverstone Networks (RSTN) have in common? They all sport a
market capitalization in excess of $1 billion (despite the
massive tech sell-off of the last 18 months), and they all toil
in the looming shadow of Cisco Systems (CSCO).
Although growth investors continually check the pulse of these
other tech upstarts, they can't do research in a vacuum. As goes
Cisco, so goes these networkers.
To be sure, these companies can try and wrest a few points of
market share from Cisco. But if the market for switches and
routers doesn't rebound sharply, share gains will result in only
a minor revenue uptick. And no one has greater visibility into
the direction of the networking market than Cisco. So when Cisco
CEO John Chambers speaks, the sector listens.
Click here to read more:
thetelecommanalyst.com
4. International wires: Korea advancement
Three telcos in Korea are well positioned for long-term growth and
attracting analyst interest.
By Ben Mattlin, equity research columnist
A recent report from CLSA Emerging Markets (Dec. 13, 2001) hailed
South Korea as "one of the world's leading telecom markets." The
report cited the rapid growth of both cellular and broadband in
this nation of 50 million, and ended with the rhetorical
question, "Isn't it an obvious market in which to be overweight?"
A quick screening of international telcos with an average analyst
rating of 2 ("buy") or better confirms the assertion; in fact,
there are three companies passing this screen that are based in
South Korea.
Click here to read more:
thetelecommanalyst.com |
