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Dow Jones Newswires -- September 3, 1998
Analyst:Equipment Makers Best Investments In Telecom Sector
NEW YORK (Dow Jones)--The best telecommunications companies are focusing on data transmission, according to Rod Berry, a technology analyst for the Robertson Stephens Information Age Fund.
In an interview with CNBC Thursday, Berry said he likes Cisco Systems Inc. (CSCO), a company pushing its way into the telecommunications equipment market, which could offer huge money-making opportunities. He said the company already has made "key wins" in that market, signing deals to provide equipment to Sprint Corp. (FON) and Frontier Corp. (FRO).
With Cisco shares trading about 12% below their 52-week high, Berry noted, they are a bargain.
The analyst recommended Lucent Technologies Inc. (LU) stock, currently trading at about 30% off its high. Berry called the company "the incumbent equipment provider in the developed world."
He expects Lucent to soon move into the data equipment business by fishing for a high-profile acquisition.
Additionally, Berry likes BCE Inc. (BCE) unit Northern Telecom Ltd. (NT), the Toronto telecommunications equipment maker, chiefly because it has been successful selling products to deregulated local exchange markets in the U.S.
Berry also suggested WorldCom Inc. (WCOM), explaining that when the carrier finishes buying MCI Communications Corp. (MCIC), data traffic business will account for 28% of its revenue. According to Berry, data traffic has surpassed voice traffic in terms of volume.
"That's where the real growth is going forward," he said.
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