LU: Long-term Prospects Message Board

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Technology Stocks : LU: Long-term Prospects

LU 2.625

+2.9%

Dec 5 9:30 AM EST

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To: Don Dorsey who wrote (34)	4/24/1998 9:39:00 AM
From: RavBruce	Read Replies (1) of 82

This is from Jubak, an analyst at Microsoft Investor that I find is often insightful. He has a discussion about the cockroach effect: if a company announces one strong earning suprise, it will probably have a few more. Lucent fits the bill. See this passage and I will give the full site. "Looking at a company's business fundamentals also gives me clues about how far to ride an already very hot stock. On April 21, Lucent Technologies added a 36% surprise to the 13% it recorded last quarter. With the stock already trading at a price-to-earnings ratio of 206 and showing a relative strength of 97 over the last three months, is this a stock to buy or one that's already peaked? The dip from a relative strength of 98 over the last six months to 97 is probably insignificant, but still . . . The fundamentals tell me that I should expect more cockroaches -- the good kind. Lucent's gross margins rose 2 percentage points in the most recent quarter. The products resulting from recent deals such as the 1997 acquisitions of Livingston Enterprises and Octel Communications are still working their way through the pipeline. After October, Lucent will be free to make larger acquisitions (according to the terms of its spinoff from AT&T), and that should add new products. It's enough to make my skin crawl -- in the nicest way, of course." investor.msn.com Bruce

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