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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: xcr600 who wrote (25164)	2/14/2000 3:36:00 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68168

Hi X, On CS, I like this break up of the company. CS had become too big and too slow moving to keep up with new entrants into the networking field. The value of the channel it bought from DEC has all but been lost too. I am afraid I am no longer up to date on CS's market share and product lines. About a year ago the SPECTRUM business was valued at $20 a share. It was at the time a very good product and had a good reputation. It used to be re-sold by CSCO and NT. Note that Cabletron still has a good reputation among Fortune 500 companies. On the networking side, I think CS still has the number one position on gigabit ethernet. It has been amazing how fast the margins have fallen in this market though. From the VTSS conference call, they expect this business to accelerate faster then the other telecom networking technologies in the 2'nd half of 2000. The CBS article on yahoo is mentioning a $50 price target. Given the earnings growth the last few quarters I would say the price of CS has very little downside from the current level. ******************************* cbs.marketwatch.com From the CBS article on yahoo: The biggest segment is Entersys Networks, a more traditional telecom-equipment supplier that targets Global 2000 business customers. Entersys has about $330 million in quarterly sales, but is the slowest expanding part of Cabletron with a 10 percent to 15 percent growth rate. The fastest growing segment is Riverstone Networks, which provides high-end equipment to independent local phone operators, Internet service providers and other carriers. Though it only has about $25 million in quarterly sales, Riverstone is growing at a 100 percent annual clip. Analyst Eric Blachno of Pennsylvania Merchant Group gives Riverstone a market value of about $5.25 billion, likening it to the larger Foundry Networks (FDRY: news, msgs), another hot, new telecom-equipment stock. That's almost double the value Blachno assigns to Entersys ($2.8 billion). "Right now the market is very keen on pure-play, high-growth network-infrastructure companies," Blachno said. The other two pieces of Cabletron to be spun off are GlobalNetwork Technology Services and Aprisma Management Technologies. GlobalNetwork is a consulting unit that advises corporations and carriers on design, management and security of their systems. It's growing at an 80 percent to 100 percent clip and has about $14 million in quarterly revenue, Blachno estimates. Aprisma provides management software to help corporations and telecommunications carriers run their networks. The unit is growing about 40 percent a year and has $22 million in quarterly revenue. Right now, Cabletron's market value is about $6.8 billion. Separately, the company could be worth more than $10 billion, analysts calculate.