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Technology Stocks : Nortel Networks (NT)
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To: Ali Shahbaz who wrote (2132)3/5/1999 8:44:00 AM
From: Cruiser  Read Replies (3) of 14638
 
Answer: Credibility.

I think NT still has some credibility problems with the analysts. They were burned last september by an amature performance of our *former* CFO...Also and probably more importantly we have the BAY element in play. Bay also had trouble building confidence with the analysts...

The bottom line is until and unless the stock price radically affects our ability to do business then we will continue to build a very strong competitor to LU and CSCO. The stock price comes into play for acquisitions, employee morale, and customer confidence.

NT has been growing at a fairly steady rate for 5+ years. The rate of return is far above average. There is no reason to believe that this will not continue, especially given NT's quick move to address the rapidly moving convergence of voice and data (we were first remember by 9+ months). Now of course the stock price itself fluctuates wildly on a day-day, month-month basis but the trend is clearly up.

The internal view of NT from the Bay perspective is extremely positive. Almost without exception everyone I talk to is very enthusiastic about NT and how much value they have brought to Bay. NT has handled the integration of Bay very well and in fact reversed merged large segments into Bay.

If we are to continue to remain on the multi year uptrend, NTs stock price will have to trade between 60-90 over the next 12 months. In fact the stock needs to move, and remain, above 60 in the next 4-8 weeks.

So I guess I my attitude and outlook may change if I'm proven wrong. But for now I remain incredible bullish for NTs long-term outlook.

Cruiser
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