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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Mehrdad Arya who wrote (32620)	7/26/1999 10:05:00 AM
From: Bruce L	Read Replies (2) \| Respond to of 45548

Very interesting, thoughtful post. I've carefully re-read it twice and I still don't fully understand everything you've said. <<There is no proven formulae but luck and fraud>> What do you think about technical analysis?

To: Mehrdad Arya who wrote (32620)	7/26/1999 11:35:00 AM
From: E_K_S	Read Replies (2) \| Respond to of 45548

Hi Mehrdad - All too often the street has a hard time determining fundamental value but rather some stocks seem to trade on emotion and -/+ psychology. You are correct that 3COM has excellent value if you measure such things as debt, book value of assets, cash in the bank and even free flow cash flow. However, how do you objectively measure the effectiveness and "worth" of management? Even with the best assets, unless you have a solid management team to grow and utilize these assets efficiently, the future value of the company is limited. I agree with you that trying to predict day trading moves is very difficult if not impossible. That is why I invest and do not day trade. I suppose the best way to spot investor interest in a stock is to monitor the on-balance volume...buy when it is negative and sell when it is significantly positive. Negative OBV is a measure of sentiment. I like to invest in a company that I believe has good long term prospects but short term is hated by the street. I try to accumulate the stock over a period of time (usually several months) and when the OBV is negative. The most important criteria for a company's long term success is how well the current and new management team can describe and execute their business plan. In 3Com's case I just do not think management has a clear business plan to grow the company past 2001. They have stumbled more than twice executing on their short term transition into cable modems from their standard modem product line. Also, they have not capitalized on growing their market share with their Networking cards moving old customers into faster and more high end products while developing new and innovative products for the home and small business user. I DO think the company has all the pieces to become a leader in every segment of the market they compete in. Management just seems too fragmented at this time and has not shown me (or the street) that this is their goal. Until I see a change in management's business plan that may include a significant company restructuring, I will just wait before I purchase. You state that "...The current course COMS has taken to capitalize on the new wave of Broadband and Wireless technology is very sound. Their vision is very well documented and the consensus in the capital markets seem to support COMS vision, but uncertainty as to how long this will take is what has dampened enthusiasm toward the stock..." I agree with your statement above BUT I believe management has shown (and stated) that their transition will take two more quarters while the CISCO and Lucents are executing NOW! I guess it is in the details that 3COM's management is having problems and it appears to me they still do not have it right. EKS