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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: ddcox1 who wrote (4846)	2/20/2000 3:51:00 AM
From: RetiredNow	Respond to of 14638

I agree with you to some degree, but what do you say when you apply your thinking to Cisco?

To: ddcox1 who wrote (4846)	2/20/2000 8:30:00 AM
From: Bosco	Read Replies (1) \| Respond to of 14638

G'day all - hi David, I too agree with you to some degree that NT is not a cheap stock anymore. However, if we are to look at the stock market today, the world's markets in general and N American markets in particular, NT has a better position than most in the growth arena. More important, p/e and p/s [ttm] are obviously the basic numbers one should look at; however, it depends on where would most people put NT in which category, growth or value. NT is definitely no longer a value stock; therefore, the metrics like free cash flow is unlikely the key number. One can look at growth stock in many ways also. For example, mindmeld's implicit view of NT vs the cap leader CSCO. Other things to consider are multi year growth prospect and barrier to entry. Is NT a concept stock? It is debatable. OC192 is being installed all over the place. The fact that GBLX took a bad spill last Friday is indicative that clients of NT, CSCO and LU etc are spending the money. Wireless networks are in build out mode in the developed countries. Its prospect in the developing countries are even better. The old stats suggest NT controls 70% N American backbones. The new stats say NT is building 32 out of 40 networks in Europe. Qtera is not a concept either. Test is being done. Cos like GBLX are likely to deploy a reliable long haul technologies to cut cost to appease the angry shareholders. Personally, I would keep NT anytime when compared to most of the dotcoms, or even people like CIEN and JNPR [both of which are highly specialized niche players [not sure if they are a clear leader though] in their area but too narrow to sustain a downturn in their respective segment.] best, B

To: ddcox1 who wrote (4846)	2/20/2000 11:23:00 AM
From: telecomguy	Respond to of 14638

Mr. Cox, lot of things are changing including what we consider as "fair" P/E ratios. First of all p/e ratio is only a mathematical number that the market assigned to try to assess the "future expectations" based on past historical numbers. Couple of problems with this approach. 1) relationship between past and future has changed drastically since the 50's, 60's, 70's, 80',s 90's and now in the millenium. 2) simplistic p/e ratio can often be misleading. For example, if there is no earnings but losses, what should the value of the company be? 0? or Minus Equity? 3) On one hand you talk about book value and on the other hand, you talk about discounting future stream of profits/free cashflow to assess the Net Present Value (capitalization of NT for e.g.). The two are not necessarily connected. Asset value becomes more important when you are talking about a company on the verge of bankruptcy. NT should be valued purely on future profit expectation. Future profit expectation for NT is tremendous now because of the seismic changes going on in the networking infrastructure around the world. This is the "wild west" and Klondike gold rush all over again..........instead of railway lines and roads, and towns, we are now building Fibre Optic lines, Cables, Satellites (road analogy), and Data Farms, ASP's, ISP's, Portals, Corporate Intra/ExtraNets, Virtual Private Networks, (Town-City analogy). And NT happens to be one of the prime vendors rebuilding the electronic world (roads and towns all included!). Remember how fabulously rich the Robber Barons got and you might understand better why companies like NT, Cisco, Sycamore, Juniper, JDS, etc. are exploding in value...........because they are in the drivers seat in building the electronic parallel world that are going to drive most of the GNP growth -- directly and indirectly in the next decade. My feeling is that in fact, in retrospect, everyone will agree that NT was tremendously undervalued in the year 2000 (assuming they execute of course!). Keep holding onto your Coca Cola's and Pharmaceuticals, and other Value Plays.........and you will get left behind like those investors who continue to insist on buying chuckwagons and horses for investment.

To: ddcox1 who wrote (4846)	2/20/2000 1:45:00 PM
From: SKIP PAUL	Respond to of 14638

I agree Nortel is priced fo 30% CAGR. However it is not yet priced for margin expansion. If demand for fiberoptic systems remain supply constrained and NT maintains its lead, I can see significant margin expansion.