PALO ALTO, Calif., May 12 (Reuters) - Trading of 3Com
Corp.'s (NASDAQ:COMS). stock took an unusually heavy turn on Tuesday
amid speculation there could be more bad news about upcoming
results.
However, the worries were not universal. A number of
analysts said they believed the computer networking company had
already disclosed all its issues of concern.
3Com's stock finished Tuesday's trading session unchanged
at 30-15/16, but it was the most active issue on Nasdaq, with
more than 21 million shares changing hands.
Peter Lieu, an analyst with Adams Harkness & Hill in
Boston, said the high volumes were a spillover from last week,
when 3Com indicated it was having ongoing problems with its
gross margins. The warning prompted several analysts to reduce
earnings estimates, and left lingering questions over the
extent of the company's problems.
"There is some whispering that something untoward is
happening," Lieu said.
3Com officials could not be reached immediately for
comment.
However, Lieu said he thinks the stock is a "tremendous
value" at its current level around $30. The stock has fallen
sharply in recent weeks.
"This is a very good company," said Lieu, who noted that
most of the problems it was experiencing, such as weakness in
some Asian markets, were industrywide.
William Rabin of J.P. Morgan Securities, said, "I have a
buy on the stock. The business is basically sound and the
company's new products will drive future growth."
But Andy Schopick of Nutmeg Securities, who maintains a
sell recommendation on 3Com, said, "I don't think we're out of
the woods yet."
Schopick said he would consider changing his rating to a
hold in view of the recent drop in the stock price, but said
3Com faced the ongoing challenge of slowing industry growth as
well as transition problems from the merger last June with U.S.
Robotics in a stock deal valued at $8.5 billion. |
