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Technology Stocks : Cascade Communications (CSCC)

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To: Tera Bit who wrote (2263)	2/20/1997 2:50:00 PM
From: Steve Lee	of 3743

Another negative view of CSCC from Briefing.com FORE SYSTEMS (FORE) 33 7/8 +7/8. Deutsche Morgan Grenfell Inc. analyst Noel Lindsay is making some bullish comments on this asynchronous transfer mode (ATM) networking technology company. The analyst's upgrade to "buy" from "outperform" has helped shares push to an intraday high of $34 a share. According to Lindsay, his decision to upgrade the issue was prompted by Worldcom's (WCOM) announcement that it would spend $300 million to upgrade the data network of its UUNet Technologies Inc., an Internet service provider. Lindsay said the greatest beneficiaries of the system upgrade are Fore and Ascend Communications Inc. (ASND 63 1/2 -5/8), who both already do business with UUNet. Though the analyst boosted his 1998 earnings estimate by nickel to $0.88 a share, he notes, "the real major value in this announcement is not reflected in the numbers." According to Lindsay, the "more significant issue is merely the fact that it validates Fore's entry into the market for wide area ATM products." The analyst expects the UUNet announcement to potentially add $30 million to FORE's revenues in 1997. Based on the excellent potential created through this relationship, as well as FORE's strengthening position in the networking equipment market over the past several months and acceleration in company's ATM business for local networks, the analyst raised his 1998 revenue estimate by 6.6% to $692 million. Separately, Deutsche Morgan analyst Jim Parmelee feels FORE's success in winning a large share of the UUNet system upgrade should be viewed as a negative to recently struggling Cascade Corp (CSCC 29 1/2 -1 1/4), further diminishing CSCC's near-term visibility to earnings.

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