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Technology Stocks : BAY Ntwks (under House)
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To: WiseGuy who wrote (3300)12/23/1997 3:26:00 PM
From: WBendus  Read Replies (1) of 6980
 
Looks like the next stop is going to be back to 27 1/2. Bay Networks sports some of the best valuation levels in all of the technology sector and especially among the battered networkers. In the mist of a turnaround and continuing to make gains in marketshare, Bay Networks is the best play in the networking sector.

Today's action seems to be indicating that Bay will look to run to 27 1/2, the point where the gap would be filled and back to the downtrend line. Strong earnings in January could easily put Bay back over this trendline and start the momentum players chasing the stock.

Analyst ratings and eps estimates have been steadily and consistently rising over the past few months, even though other networking stocks are getting thiers cut. Estimates for the company's current year were for .88 cents per share on July 28 and today they are at 1.10. For 1998 full year, estimates were at 1.31 on July 28 and are now at 1.61, a 23% increase in the estimates in 5 months. Analysts have also been saying that those numbers could have considerable room to grow if the company can make its own internal goals for profit margins.

Ratings have also improved significantly, the average rating 6 months ago was 2.58 (1=strong buy 5=strong sell) and today it is at 1.88, with 10 of 26 analysts rating it as a strong buy, 9 a moderate buy and 7 a buy.

The stock has been caught in a sector downdraft and this downdraft is providing excelent opportunities to buy the share cheap. January will likely be a strong month for the stock as investors look to re-establish their positions after selling for tax-loss reasons.

Wayde.
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