Analyst's Latest Comment -
PAIRGAIN (PAIR - $11 3/16; RATED 3)
- Signs that the pricing pressure in HDSL is abating, new contract wins for
the company's small subscriber systems business or any indication of a
possible buyer could help justify the recent move up in PAIR shares.
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09:55am EST 4-Nov-98 Lehman Brothers (Steven D. Levy (212)526-2499/Sende) TLAB
Telecom Equipment/Data Networking: AEA Preview
Today's Date : 11/04/98
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* There is an old adage in technology investing that goes: "buy at AEA, sell
at H&Q." In other words buy the stocks at the annual American Electronics
Association, AEA, Classic investor conference in October/November and sell
them at the Hambrecht & Quist Technology conference in late April/early May.
* Given the recent rebound in many technology stocks, however, this year's
buying opportunities might not seem as bountiful.
* Nonetheless we believe that there are still likely to be some catalysts for
near-term stock movement based on the presentations and meetings at the
annual AEA Classic.
* Below we have outlined the one or two items that investors should, in our
opinion, focus on for each of the companies we follow that are confirmed AEA
presenters (Tellabs, RELTEC, Advanced Fibre, ADC Telecommunications, and
PairGain).
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There is an old adage in technology investing that goes: "buy at AEA, sell at
H&Q." In other words buy the stocks at the annual American Electronics
Association, AEA, Classic investor conference in October/November and sell
them at the Hambrecht & Quist Technology conference in late April/early May.
Given the recent rebound in many technology stocks, however, this year's
buying opportunities might not seem as bountiful. Nonetheless we believe that
there are still likely to be some catalysts for near-term stock movement
based on the presentations and meetings at the annual AEA Classic and for
each of the companies we follow that are confirmed AEA presenters we have
outlined the one or two items that investors should, in our opinion, focus
on.
TELLABS (TLAB - $54 1/16; RATED 1)
- The most important thing we are looking for is expanded details of Tellabs
entry into the data-oriented ATM world. This should set the stock up for
further P/E multiple expansion and remove some of the skepticism that seems
to remain with certain analysts.
- We fully expect the company to remain bullish about its near-term
prospects-fourth quarter 1998 and 1999.
RELTEC (RLT - $24 3/16; RATED 1)
- The critical issue is likely to be how much confidence RELTEC management
can engender in the idea that the September quarter's problems are truly
behind them.
- It might also be interesting if RELTEC is able to give an early read on its
recently completed acquisition of Positron Fiber.
ADVANCED FIBRE COMMUNICATIONS (AFCI - $11 3/16; RATED 1)
- A critical factor in our investment recommendation is the idea that the
September quarter represented the low point in the company's foreseeable
financial future.
- Some clearer indication of a new CEO, rumors are floating all around, would
also be constructive.
- In addition, any signs of a pickup in international business or an
acceleration of revenue from the CLEC market could also be catalysts.
ADC TELECOMMUNICATIONS (ADCT - $23 1/2; RATED 1)
- Given the company's fiscal year, which ended last week, the most pressing
issue here is likely to be guidance for the next quarter or two. In other
words, investors are probably going to be paying particular attention to
ADC's "body language."
PAIRGAIN (PAIR - $11 3/16; RATED 3)
- Signs that the pricing pressure in HDSL is abating, new contract wins for
the company's small subscriber systems business or any indication of a
possible buyer could help justify the recent move up in PAIR shares.
We recognize that its always tricky trying to invest based on expectations of
near-term presentations, but in the case of these five companies, we are only
looking for reinforcement of our current investment theses. |
