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To All:
From: Doug Bean Monday, Mar 15 1999 10:24PM ET
Recently I spoke with the IR and others at PAIR. I was very encouraged by the conversation and they said the would send me a "full information
packet" , which they did .
It was full or reports and solid information.
We sometimes get the broker recommendations in PRs but never ,it seems, the whole analyst's point of view. I have read several which were enclosed and below are some of the highlites that pertain directly to us and contain timely information. I used only reports dated after 1/99.
BT ALEX BROWN:
"The company continues to be cash flow positive" "Pairgain generated
$13 million in cash during the quarter, which is after the repurchase of
1 million shares of the companys common stock in the quarter"
"We maintain our "buy" investment rating on the stock based on PAIRS
value as an acquisition candidate".
Management says" it believes that it has secured primary supplier status
at level 3 for that company¹s Wideband HDSL shelf product line".
Management says"PG-plus was approved by Sprint"
Bell atlantic and Ameritech are the primary customers of PG-Plus/PG-Flex and that the company expects to see revenue from a third RBCO later in this year".
OUTLOOK:
We believe the first 1/2 of 1999 will be challenging for PAIR.
Trial orders of the AVIDIA platform occurred in the quarter and the
company expects to book a small amount of revenue from this during the
first quarter.
Management believes that Avidia will add $20 million to revenues in
1999.
Piper Jaffery:
The first half is challenged by continuing HDSL price pressure. While
the AVidia DSLAM product has promise, it will not produce significant
sales until the second half of the year"
"We are cautiously optimistic on the prospects for the Avidia DSLAM. the
product is in service providers, and Management expects to announce a
new customer in the not too distant future".
"Avidia is expected to generate modest revenues in the first 1/2 of 1999
and we are modeling a $25 million contribution to 1999 revenues"." If
this estimate is achieved. PAIR should show interesting sequential
revenue and earnings growth in the second half".
Warburg Dillion Read:
"The company remains upbeat about PAIRs longer term prospects but
cautious about the first half of 1999."
"We think there is limited downside potential given that THe company
has $3 per share in cash, continues to generate positive cash flow, and
has the potential of the new Avidia platform".
We think PAIRs balance sheet is remarkably solid. A/R DSOs dropped
sequentially in the fourth quarter of 1998 to 30 days from 34, and
inventory turns remain essentially flat. In addition the company
continues to generate cash. In fact during the fourth quarter the
company repurchased one million shares of its stock , yet still
generated $13 million in cash from operations".
"Pairgain stated that it had received "preferred vendor status" ( eg no
exclusives or purchase requirements) at both Level 3 and Nextlink".
Avidia; Two customers have ordered the product and a small amount of
revenue willbe recognized in the first quarter. In addition 6 other
customers have the Avidia in beta testing..
"we forecast $10.5 million in Avidia sales in 1999 and $43 million in
2000".
Volpe Brown:
"We continue to be encouraged in the progress on the ADSL front".
"We feel the company is moving in the right strategic direction, towards
system level products".
"We continue to believe the shares represent an excellent value and a
quality play on emerging xDSL technologies. We reiterate our "BUY"
rating".
"Momentum continues to build for the Avidia DSL access system as
evidenced by a win from a small unnamed customer announced by management
on the call in which PAIR was one of seven vendors competing for the
bid."
"we expect AVidia revenues to total at least $20 million during 1999".
"we believe it remains well positioned as incumbent supplier at SBC
Communications".
"PG flex and Plus products recently received IXC approval and are now
shipping to Sprint and have substantial presence in two RBCOs with the
possibility of penetrating a third in the near future. We believe these
products are one of Pairs most profitable businesses at this
stage and forecast growth of more than 50% in 1999".
"Pairgains balance sheet remains pristine"
STEPHENS Inc:
"Pairgain will re-deploy one third of its sales force to call on CLECs
and will hire a few dozen new sales people to serve this channel".
"In our view the second half of 1999 will be definitive, as major telephone companies pick their early suppliers for the major roll outs to occur in 2000 and 2001".
SOUNDVIEW FINANCIAL:
"We believe SBC will announce its upcoming HDSL contract award within
the next 45 days ( FEB 8th date) and also believe that it is likely to
split the business between PAIR and ADTRAN."
"While Americatech and Bell Atlantic remain strong PG flex customers,
Bell South is close to coming on board as well"
US west remains stuck in the mud.
Nationsbanc MONTGOMERY:
"Stock remains a buy"
"we believe that the primary upside driver may be potential contract
announcements regarding the Avidia platform."
Thats all I can read and type for now.
yes the comments are taken at random and there were some negative
comments too. However these are my concept of the basic thrust of the analysts opinions.
One question comes to mind.....
WHO THE HELL WOULD SELL NOW?????????
You can get out and hope to get back in , but it appears almost every analyst says the second half will be strong.. if you are not in now,, will you have the hair to buy it when its above 12 ?? If so i guess you can take a chance and sell now.
I am not selling i am buying,, but thats just me ,, you do as you need to
CRDoug |
