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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: fumble who wrote (13624)	10/13/1999 2:22:00 AM
From: nick cash	Read Replies (1) \| Respond to of 18016

a rather lengthy evaluation of nn..... figure i'll reemerge here amongst the carnage. sadly, last week, feeling better about the overall market, anticipating some good press out of geneva this week and sitting with too much cash in the portfolio (34%); i increased my nn position by ~3% to over 8% of the portfolio- oops. that said, if the stock implodes from here, i am willing to bring nn up to a 15% weighting. long time readers of the thread know that i have been in and out of nn rather successfully since 93 and that i am not a cheerleader for the stock. so why am i buying? i was in ottawa for the agm. i am confident that nn is within a quarter or 2 of blowing away estimates. after this qtr (due to seasonally slow august), linearity will improve in their quarters. i see a lot of demand for the 50gig 36170; and with the 450gig version following so close behind, they are about to move ahead of the curve. i feel that lmds is still not really factored into analyst's estimates. logistical screw ups are behind them. do the math on the big revenue short fall from Q4 (when they were unable to ship because of their supply chain problems). seems to me that there's a lot of unrecognized revenue hanging around the balance sheet. as i see it, they have FINALLY learned the sand-bagging game (it only took 6 years). i believe that they are now in a position to 'manage' earnings the way csco/msft etc etc do. as such, i see another earnings miss as highly unlikely- if they miss with that much padding, mgmt should be tarred and feathered in front of parliament. contrary to the idiot analyst quoted in the ottawa citizen, nn is GAINING not losing mkt share. i just shook my head when i read that article. nn's addressable market is expanding by 10 fold with the new products that have rolled/are rolling out. this fact is highly ignored imo. reading between the lines @ the agm, i got the feeling that management will NOT sell this company for anything within 150% of the current print. i also got the feeling that they've been approached and that nn rejected (no basis for this other than reading dodges to my questions). if i'm right (clearly a big 'if'), then why is the 'NOT for sale' sign out? i believe it's because they realize that they are on the cusp of breaking out in a big way in revenues and earnings and that they are not going to sell b4 this happens or before the market revalues the share price to reflect the dynamics of their business. so.... why's the stock @ 22 and change with fido bailing like the ship is sinking? it is troubling to me that fidelity is selling. i don't understand it. i look for solace in the fact that most analysts and portfolio managers are very smart people, but not so smart about timing their buy and sell decisions. if fido was right about every stock decision, their funds would all be up 100%+ every year. the stock is the poster child for 'show me' stocks. nobody wants to step up to the plate on nn right now. others in the sector have soared while nn has languished. even previous disasters like afci, cs, and cien (thankfully my portfolio is in @ <7, ~10 and 11 respectively) have made people serious $ in the past year. everyone understands that there is a lot of potential upside if the nn story changes; and they don't mind missing the first 10-20% waiting for proof in the pudding. i stated it very clear to tm- 'the short of it is that contracts are nice but, given the past, you're not going to win converts until you blow away earnings estimates accompanied by impressive revenue growth backing up the bottom line #'. i'm confident enough that this will occur to place my bets a bit early (a bit too early with last week's add- ehhhh). i've rambled on long enough. sure hope someone sprinkles some fairy dust on the market between now and the open, the futures look really ugly. ok..... along with my standard disclaimer, my new counsel has directed me to put more 'keep me out of trouble' disclaimers on the end of my posts (ridiculous since i use an alias here and nobody <well, almost nobody> knows who i am or the name of my firm). here goes: all information contained herein is for informational purposes only and does not constitute a solicitation or an offer to sell advisory services. both myself and clients of my firm currently hold long positions in nn, afci, cs and cien. and, of course, all clearly imo only........nick