As far as I can tell, LU is a so so company in a crummy industry, so I wouldn't touch it. LU may swing from $2 to $3 and make you 50%, or it may swing from $2 to $1 and lose you 50%. Pretty much a crapshoot, but over the long run investing in a slow growing, competitive industry with no monopoly company and the buying power in a knowledgeable, concentrated customer base just don't seem like a good idea. And inside telecom, LU has legacy equipment and CSCO has the future equipment, so you are investing in the company that dominated the traditional voice networks which are likely to get a smaller and smaller chunk of the purchasing pie as the years roll on.
It's like buying Novell (before this Linux thing hit the tape a month or so ago) because "they may have a decent quarter".
Anyway, good luck.
You want a good cheap stock that will probably have a more than "decent" quarter, buy CSC. 25% revenue growth, 10% earnings growth and trailing 12 months 250% bookings growth, and current price to sales of 0.6x and current forward PE of 14x compared to their 1990s averages of 1.0x and 23x, respectively. Them positive fundamental trends and cheap valuation numbers look a hell of a lot more attractive than LU to me....
Elroy |
