Nortel today announced extension of share repurchase offer between 4 to 8 million shares to be repurchased at market prices on New York, Montreal and Toronto Stock Exchanges. Should help Nortel shares beat the market over the next year.
Furthermore, CIBC/Oppenheimer maintains strong buy rating on these shares, and analysts have upped future yearly earnings estimates. Comments from CEO a couple of weeks ago still hold, only 5% profit exposure to Asian markets, double digit profit growth higher than revenue growth - very encouraging words. I think COMDEX is next week, and usually companies like Nortel rally after attending analysts report back with positive comments, as I expect.
The $7 decline on Thursday was a red herring, since volume was so low on such a large decline and also based on inaccurate reasons explaining the loss owed to Asian problems. Technically has broken out of its weekly resistance level. Huge block traded today (approx. 30,000 shares) shortly after lunch hour, clearly standing out in the relatively moderate volume lately. With an increase in volume, I'd expect some more multi dollar jumps on the stock. I believe that Nortel will split before the year ends, that would improve liquidity and volume and thus visibility. Does anyone know exact day of the split? |
