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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 79.92

+1.9%

10:40 AM EST

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To: Eric who wrote (24820)	5/2/1999 9:16:00 PM
From: jach	Read Replies (1) of 77400

3COM and WLANs - Investment Ideas By The-Adviser.com - released on 4/26/99. New York - 3COM is a leading supplier of local area networks (LANs) and wide area networks (WANs) systems. It recently reorganized internal business units to target small and midsize businesses and individual consumers. 3COM took on the business reorganization because it found itself unable to compete with firms such as CISCO and LUCENT who are increasingly focusing on large businesses. With revenue soft and business difficulties surrounding the company, holders of 3COM stock have watched their value plunge from a 52 week high of $51 to a low of $20. The Company believes that its focus on home and small business networking products, particularly wireless area networks, will position the company to the forefront of a new computing era. This era will consists of hand held Internet enabled computer appliances that connect to the Internet via a wireless network. As 3COM attempts to reposition itself - it finds itself involved in takeover speculation. SIEMENS and ERICSSON have apparently expressed interest. These rumors have sent the stock up from $20 to a current value of about $25 (on the date of this report 4/18/99). Despite this increase, our analysts believe that 3COM (COMS) is currently undervalued. The underlying business, despite softness, appears to be healthy. The markets for wireless-networks, home appliances and hand-held mobile computing products such as the Palm Pilot will grow significantly. It is not a matter of if but a matter of when. We believe the current price decline provides an ideal opportunity for an investor looking to increase or initiate a position in this fast growing arena. As far as takeover talks, we believe that 3COM is susceptible to being acquired. This industry will certainly be consolidated. In addition to 3COM, we believe small but established firms such as Proxim (PROX) and Telxon (TLXN) are susceptible to being acquired. We expect 3COM to trade between $25 and $35 until business performance improves. Should acquisition talks continue, 3COM may trade higher. Our three year target stock price for 3COM is $80. An acquisition at anytime would provide additional returns.

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