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Technology Stocks : Winstar Comm. (WCII)
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To: Bernard Levy who wrote (9485)12/7/1998 3:18:00 PM
From: Hal Barnett  Read Replies (1) of 12468
 
Bernard,
Responding to your request for comment on CLECs,
I am strongly influenced by the company's plan
and how well they are executing against their plan.
WCII has a national (and now apparently international) scope
vs. a regional focus for many of their competitors.

I went to MarketGuide and pulled out the Snapshot and
Highlights pages on the CLECs in your list. Snapshot gives
a summary of the plan re scope and the Highlights page
gives quarterly revenues. I don't think EPS is a fair measure
to use to evaluate these companies this early in their business development.

One measure of the effectiveness of a company in executing
its plan is to examine sales growth. I list quarterly revenue
and summed up the trailing 4 quarters to get a chart of annualized
revenues (See Table 1).

I dropped HYPT from your list because their revenues were
much lower than all the other companies.

Table 1 Trailing 4 quarters revenue in $millions

Date WCII ICIX ESPI MCLD NXLK
12/97 72.9 247.9 59.0 267.9 57.6
3/98 107.3 340.7 78.3 366.5 74.1
6/98 150.7 480.8 102.4 475.6 94.5
9/98 193.4 602.0 131.8 574.9 118.9

I then use the trailing 4 quarters of revenue
to establish a rate of revenue growth.
With the annual revenue of 12/97 = 100
I get the scaled revenue results in Table 2.

Next I dropped the companies that had scaled 9/98 revenues under 200.
The five survivors of this process were: WCII, ICIX, ESPI, MCLD and NXLK.

Table 2 Trailing 4 quarters revenue scaled to 12/97 = 100

Date WCII ICIX ESPI MCLD NXLK
12/97 100 100 100 100 100
3/98 147 137 133 137 129
6/98 207 194 174 178 164
9/98 265 243 223 215 207

All five companies have strong rates of revenue growth.
WCII appears to be the best company in this group.

Regards, ...Hal
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