Serge Collins, in your opinion Carbetron System is the best idea in
in tech sector. So why you here?
To: Bruce McVicar (5800 )
From: Serge Collins
Tuesday, Mar 23 1999 5:21PM ET
Reply # of 6026
I don't think today's slide is indicative of much. The stock actually opened higher, but
started to slide with the market. I think those who bought recently and anticipated the
stock going above $11 or $12, started to bail out once they realized the stock was
headed back below $10. After that, the slide just fed on itself, helped along by the
overall market. You can view today's action as a classic shakeout as it got rid of a lot of
traders who tend to depress any share price whenever it gathers a head of steam.
The fact that the stock is back to where it was before this latest news tells me the selling
was overdone. The restructuring will save the company from $50 to $80 million a year
at the same time as it migrates to sales of higher margined product. These savings
amount to about $0.30 to $0.45 per share. If their sales hold up and they are successful
with this restructuring, and we have no reason to think it won't, CS will have a decent
year. As such the argument can be made that, on a valuation basis, CS is undoubtedly
the best value in the networking sector and probably in all of the tech sector.
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Cabletron Systems (NYSE: CS)
Time: 10:40AM
Last Trade
10 3/4
Change
+ 1 11/16 (+18.62%)
Bid
0.000
Ask
0.000
Volume
02,824,0000
Prev.Close
9 1/16
Open
9 1/8
Day Range
9 1/8 - 11 00
Last Tick
0-0
Avg.Volume
01,443,7000
52-week range: 6 5/8 - 15 5/16
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