Couple of interesting comments from InvestorTools related to the Networking sector :
1. Undervalued 3Com Supplier Set To Shine In 1999 (BELF)
Friday, March 27, 1998
"Bel-Fuse's (BELF) opportunity to see significant demand
from its ADSL (Asymmetric Digital Subscriber Line) products
is tremendous," Jonathan Steinberg says about the electronic
components supplier. "Jupiter Communications, a research
company, forecasts that ADSL technology will provide fast-
access Internet services to 3.4 million homes by 2002. This
means that 1999 could be an excellent year for Bel-Fuse as
it ramps up production of ADSL products. The tail end of
1998 could be significant as well."
But the real story remains Bel-Fuse's valuation. As
Steinberg noted in his March issue, when he first
recommended the stock: "not many technology companies grow
at 15% to 20% a year and trade at seven times 1997 EBITDA
(Earnings Before Interest Taxes Depreciation Amortization,
otherwise known as cash flow). The company also trades at
1.15 times its 1997 sales, 13 times its 1997 earnings and
11.6 times (the newsletter's) very conservative estimate for
fiscal 1998 of $2.00 per share."
In his April issue, Steinberg reiterates his buy
recommendation with a price target of $30 per share, or 15
times its fiscal 1998 estimate.
For more on Jonathan Steinberg's recommendation see
"Bel-Fuse," April 1998, Individual Investor's Special
Situations Report. Jonathan Steinberg provides one
undervalued stock per month poised for substantial growth
and profit.
10. Bay Networks On The Rebound (BAY)
Monday, March 23, 1998
"On January 20, the provider of network communication
products reported earnings that fell four cents per share
shy of analysts' estimates," writes Bernie Schaeffer about
Bay Networks (BAY). "Though the shares initially reacted by
declining some 13% over the following week, the stock has
since surged, gaining over 25% over the past month. The
shares have been trending along their 10-day and 20-day
moving averages, and have now broken above resistance at 32
following a bounce off the 20-day (moving average) that
ended a two-week consolidation between 30-1/2 and 32.
"Call activity on BAY has been quiet of late, a sign that
the shares have further room to run. Furthermore, we like
the implied volatility on BAY's options as they are at their
lowest level since August 1997. Finally, the entire
networking sector is on the rebound as the relative strength
of the AMEX Networking Index (NWX) compared to the SPX has
been uptrending since late January. Keep a watch on BAY for
further upside potential.
"Recommendation: Buy the January 1999 35 call." Schaeffer published this recommendation on February 26, 1998.
For more on Bernie Schaeffer's recommendation see "Leaps
Portfolio," March 1998, The Option Advisor. Bernie Schaeffer
provides practical options recommendations that are simple
to understand and execute.
investools.com
Mang |
