Actually NN is traded on the NYSE, not NASDAQ....
All:
I attended their big job fair and demonstration yesterday. I must confess that I
really am only now starting to appreciate just how amazing this company is.
Here are some comments:
- I have always assumed that Newbridge success the last few years has been
in part because the carriers were buying a lot of ATM equipment from them. From speaking with a few employees, I'm starting to think that this is not true. It
sounds like up until now the carriers have only been "dabbling" (my word) in
ATM, but are about to take the plunge en masse. Thus the big BT contract. As
soon as a couple make the move, others are likely going to follow suit, because
they don't want competitors to have the technological upper hand. For example,
BT and MCI are in bed together now (i.e. Concert), so MCI may very well go with
a big NN network itself. So I'm thinking...well Sprint and AT&T won't want to be
left in MCI's dust will they? Rumors of deals similar to BT seem to be alluding to
this. In short, perhaps "we ain't seen nothin yet"...
- Several competitors (eg Cisco, Ascend, NT) "could" have won this contract,
and indeed may have made cheaper bids. What excited me about this is that
BT seems to have been willing to pay MORE for Newbridge equipment! This
tells me that Newbridge has the best technology, and they are successfully
making sure that potential customers know that. BT obviously must have
decided that "you get what you pay for". I read a white paper on the NN/Seimens MainStreetXpress strategy, and it describes how on the surface
the upfront costs may seem higher, but the long term benefits of buying their
technology (i.e. highly scalable, better revenue-generating features, etc) make
it far more cost efficient than "cheap" equipment from competitors. It would
seem that that may not just be hype. Now just imagine if MCI, Sprint, AT&T, etc
all come to the same conclusion....
- An illustration on just how fast this company is growing: not a single person
I talked to had been there longer than 1.5 years. On the surface, that worried
me, but many of them were experienced designers and managers stolen
from older companies. Still, managing that growth is going to be a challenge.
- NN is getting closer and closer to having that holy grail of networking: the
ability to offer end-to-end solutions. LAN, WAN, backbone, whatever. I'm
drooling over the potential of an alliance with 3COM...I own stock in both
companies and I think they are extremely complementary.
- Despite this table-pounding I'm doing, I still think that the stock has a lot of
growth already priced into it. That doesn't mean I plan to sell, just that I don't
think we're talking about a "double-dip" situation here, where you get the benefit
of both the market correcting the valuation upwards, and the natural growth. I think that if the stock just grows with the company, we should see a pretty darn good return over the next few years.
-This is an insanely great company
Please do not interpret any of the above as insider information, or advice to
buy or sell. It is all just my analysis of publicly available information and
vague conversations with a few employees. I was given no information about
unannounced deals, or the details of how the BT deal was won. I'm just
speculating here - and perhaps jumping to unwarranted conclusions!
I'd appreciate any comments on this stuff...
Andrew |
