Didn't see Governali's recent WCII/CLEC comments yet, so here they are (I'm pulling out the pertinent WCII comments from a 3 part CLEC report):
"..We are re-emphasizing the CLEC sector as the biggest beneficiary of changes in the telecommunications regulatory/competitive landscape. In addition, we are adding to our coverage: ESPI (Buy), ICG Communications (Hold), and McLeodUSA (Hold), and NextLink (Buy). Existing Buys remain: Teleport, GST, and WinStar. COLT is rated Hold by our London- based analysts..."
"...Driven by valuation, our top picks of companies now under coverage are NEXTLINK, WinStar, and ESPI...."
"...WinStar is an attractive play on the ability to use wireless technology to deploy CLEC networks very broadly at lower capital investment levels than wired CLECs. Thus, WCII fits our bias towards looking at this group from a DCF and EVA basis. In producing the same (or better) margins, and the same (or better) revenues than the wired CLECs, with less capital deployed, our valuation approach would assign a higher value to the business. Management is largely drawn from the long distance industry, and has signficant experience in building a business that can compete against dominant monopolies..."
Also, though conservative in his valuation approach, Jack Reagan is not "bearish" on WCII. He DOES bring up some interesting questions regarding shares outstanding numbers in DCF modeling, that I hope to get clarification on soon.
PS. Re: H&Q- I liked the QWST breakout and the Tellabs presentation, but I would STILL be heaviest weighted in WCII, for most of this year anyway.
(Also, I sang the WCII tune to more than a few managers this week. I know at last one got his feet wet today) |
