ASND gets some coverage in Barrons
Time to buy. Part 2, November 10, 1997
Q: A year ago, the networking stocks were the hottest shares in the land. Cisco, Ascend, 3Com -- the stocks were soaring:
Morris: As prices have come down, revenue growth has been compressed. Almost all of the networking companies, even Cisco, have seen margin compression. At the same time, several companies decided to do strategic deals, which, in a momentum-driven market, absolutely kills your stocks. Big mergers also provide management challenges.
Q: You are referring, of course, to 3Com's acquisition of U.S robotics, and Ascend's combination with Cascade.
Morris: The list goes on and on. And not just in networking. From an investment point of view, strategic merge and acquisition activity has been a disaster for all parties involved, whether you owned the buyer, the target, or the combined entity. The other thing has happened is that we have been underexposed in some cyclical areas, like hardware vendors, which have good performance. |
