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Technology Stocks : Newbridge Networks

NN 13.98

+0.9%

Nov 26 3:59 PM EST

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To: Doug who wrote (9459)	2/9/1999 2:22:00 PM
From: pat mudge	Read Replies (2) of 18016

Valuation is closely tied to total rev and Income growth/share. Currently for NN these are tightly bound and therefore NN may not command a high multiple that is accorded Companies with better growth rates. Which means as ATM sales increase over TDM, NN will demand a greater multiple. Margins are lower during the development phase and improve as products ramp. True, competition can squeeze margins temporarily, yet in the long run, gaining and/or maintaining accounts leads to long term profitability. Alan hinted on the cc that the coffers are full and combined with their partner's strength, they're in a good position to gain market share regardless of pricing pressures. I fully believe NN's product superiority and Alan's management skills make it an irresistible play in networking. Being the global carrier-level ATM leader isn't in question --- as research studies have shown --- getting recognition is. My knee may be lame, but my analysis skills aren't. I'm back and in fighting trim. Even my blue jeans are loose. :)) Pat

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