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Technology Stocks : Newbridge Networks
NN 14.21+1.7%Nov 28 9:30 AM EST
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To: Doug who wrote (6243)8/28/1998 5:37:00 PM
From: Ian@SI  Read Replies (3) of 18016
 
Doug,

I'd be happy to share some of the valuation measures with you. I'll
let you and others draw your own conclusions from the data.


_____________________________________________________________________
Communications Equipment S&P Index            |       NewBridge
Key Ratios & Measures  5 Year Range   Current | 5 Year Range   Current
P/E                   17    - 110      39.7   |     15 - 83      38.5
Price to Book          2.8  -   8.4     6.4   |    3.7 - 16.3     4.3
Price to Cash Flow    11    -  25.4    19.4   |   12.6 - 49.1    20.4
Price to Sales         1    -   2.9     2.17  |    2.9 - 11.2     3.41
Return on Equity      14.3% - 18.9%    16.6%  |  11.4% - 33.1%   11.8%
                                              |
BETA                          1.39            |         1.48
                                              |
Capitalization                                |
% LT Debt to Total Cap             23%        |          31%
Owned by Institutions              42%        |          29%
Market Capitalization         72.2 Bil        |       3.8 Bil
                                              |
Price Chg - YTD                  39.8%        |        -38.2%
                                              |
First Call Growth 98,99     -11 %, 42 %       |    23 %,  51 %
______________________________________________|______________________


Some observations:

NN much closer to its Low Valuation than COMEQ for P/Bk, P/Sales and
ROE. i.e. With depressed E, relatively modest increase in Revenues
will have a substantial positive impact on P/E, ROE.

NN is underowned by institutions relative to the sector.

NN's price has been trashed this year while the sector is still up
almost 40%.

First Call Analysts are predicting significantly better growth for NN
than for the rest of the sector.

It's difficult to imagine relative underperformance from this specific
point on the graph if looking at a 1 to 2 year period into the future.

... but one cannot help but notice that NN gets a higher Beta and a higher top end to its valuation by the Street. ... and it's now at the low end of the range.

I'm patient.

FWIW,
Ian.
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