Here is part of the upgradeThank me later an instition sent this to us
WIRELESS SERVICES AND WIRELESS EQUIPMENT OVERVIEW PART 1 & 2:
[CLNTF]/
[PC]/[PR]/[WWCA]/[GEMS]/[AERL]/[NXTL]/[NOKA]/[OMPT]/[PAGE]/[RCN]/
[VCELA]/[ATI]/[APGR]/[ERICY]/[MCLL]/[MTEL]/[PTEL]/[PFNT]/[VOD]/[XO]
Jeffrey L. Hines (212) 237-2106
Christopher M. Larsen, CFA (212) 237-2386
* We are re-establishing coverage of various wireless services and
wireless equipment stocks with Clearnet and Western Wireless our
two core wireless holdings for 1998.
* STRONG BUY (1) rated stocks include: Clearnet (CLNTF), Price
Communications (PR), PriCellular (PC), Western Wireless (WWCA),
and Glenayre (GEMS).
* BUY (2) rated stocks include: Aerial, Nextel, Nokia, Omnipoint,
Paging Network, Rogers Cantel and Vanguard.
* MARKET PERFORM (3) rated stocks include: AirTouch, Arch
Communications, Ericsson, Metrocall, Mtel, Powertel, Preferred
Networks, Vodafone, and 360 Communications.
* We will continue to monitor the developments at Globalstar and
Iridium.
* US investors will increasingly realize as 1998 progresses what
we've been highlighting for sometime; i.e., "wireless will
replace wire" as new digital technologies greatly enhance the
quality and functionality of various wireless offerings as
two-way voice is destined to go mobile over the next 3-10 years.* Our STRONG BUY
rated wireless services stocks are well insulated
from investor concerns regarding telecommunications investing;
i.e., the Four C's: Capital, Commoditization, Competition, and
Convergence. Glenayre is one of the cheapest stocks in the
wireless equipment arena.
* Taken as a whole, telecom stock performance somewhat dissipated
in 4Q97 after posting strong returns in the previous two
quarters.
* 3 of the 7 Telecom Indexes posted strong 4Q97 performance versus
the S&P500. Top performance was from the Cable Index (+31%, 3
months ending 31-Dec), Wireline Index (+20%), and CLEC Index
(+17%).
* Wireless Indexes (Cellular, PCS, Paging, and Equipment) all
posted negligible to negative returns during 4Q97.
* The Equipment Index was weighed down by investor concerns
regarding Asia/Pacific which, in general, makes up a rapidly
growing source of revenues for many of the companies in the
Index. The Cellular, PCS & Paging Indexes were affected by
increasing concerns regarding the competitive environment.
* During 1997 telecom stocks generally performed in line with the
market as 44% (44 out of 99) of the stocks that we track posted
better than market returns (and 55 out of 99 worse than the
market).
* Moving forward in 1998 we believe that investors should continue
to focus on those Wireless Service stocks most insulated from the
Four C's. Our top picks are Clearnet, Price Communications,
PriCellular and Western Wireless.
* Ericsson and Nokia face significant challenges over the coming
year or two, in our opinion, as margin vulnerability in the
handset business could interrupt earnings growth more than
"Asia." We believe Glenayre shares are attractively priced
despite its exposure to Asia. |
