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Dow Jones Newswires -- October 15, 1998
Newbridge Up 13%; Benefits From Sector Move, New Pacts
By BEN DUMMETT
Dow Jones Newswires
TORONTO -- Newbridge Networks Corp.'s (NN) stock is higher Thursday, even though the networking company hasn't made announcements.
Analysts said the rise in Newbridge's stock is partly due to gains in several networking stocks. For instance, on Nasdaq Cisco Systems Inc. (CSCO) has climbed 4 5/8 to 56 3/4, Ascend Communications Inc. (ASND) has risen 3 5/16 to 46 1/4 and Fore Systems Inc. (FORE) is up 1 5/8 to 12 1/16.
In Toronto, Newbridge is up 3.30, or 13.3%, to 28.10 on nearly 1.9 million shares.
The sector is benefitting from renewed confidence that the bigger telecom equipment manufacturers still have an appetite for acquisitions following Alcatel's (ALA) purchase earlier this week of closely held Packet Engines Inc. in a deal valued at US$315 million, said David Beck, analyst at TD Securities Inc. Speculation that Lucent Technologies Inc. (LU) will soon start making acquisitions also is contributing to this confidence among investors, Beck added.
More specifically, Newbridge's relatively inexpensive stock price, which is down about 68% from its 52-week high, and signs that the Kanata, Ont.-based company is on the road to recovery could be giving the stock an added lift, analysts said.
James Kedersha, analyst at SG Cowen Securities Corp., notes that Newbridge is showing signs of gaining on Ascend in winning contracts for asynchronous transfer mode (ATM) networking equipment. He notes that Newbridge's has won four such contracts since August.
In addition, Kedersha said he soon expects Newbridge to announce another deal with BellSouth International, a unit of BellSouth Corp. (BLS).
A Newbridge spokesman declined comment.
Though the expected BellSouth International contract isn't big, it's another indication that Newbridge is holding its ground against the competition, said Kedersha.
-By Ben Dummett; 416-943-7807; ben.dummett@dowjones.ca |
