Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: telecomguy who wrote (5121)	3/24/2000 8:05:00 AM
From: Liatris Spicata	Read Replies (1) \| Respond to of 14638

telecomguy- Reobert DeFrancesco, a writer for "Louis Rukeyser's Wall Street" had a "Street Smart" article about NT this month. Some of what he said has already been covered here, but I'll relay what I think are the high points. DeFrancesco noted that CSCO management said in a recent cc that NT is now considered its biggest competitive threat among the more established phone-equipment companies (sweet music to the Bay crowd). Optical networking is the reason that despite revenue this year that will be a little more than half LU's, NT has a market cap a little less than LU's. Worldwide, the optical networking market is growing about 50% annually and is expected to reach $35 billion by 2001. NT's optical revenue grew 22% in 4Q 1999, is growing 75% annually, and analysts say demand appears sustainable for the foreseeable future. Merrill telecom analyst Thomas Astle says that over the next few years, optical networking could be close to half of all spending by telecom services providers. ABN AMRO analyst Ken Leon estimates that optical and broadband systems will generate about 40% of NT's revenue this year, up from about 25% last year, and that next year the figure may reach 60% for NT, as opposed to 25-30% for LU. Products less than one year old represented 44% of NT's sales in the recent 4Q. Wireless gear provided about 25% of NT's revenues last year and should rise as much as 20% this year. DeFrancesco noted- hot news here- that traditional valuation measures such as P/E or P/S have not been much help in picking winning stocks in the telecom sector in recent years. But strong revenue and earnings growth in telecom's fastest growing subsectors has been important, and NT has met market expectations in this regard. FWIW, NT's relative P/E ratio of 3.5 times its five-year expected earnings-growth rate is slightly below CSCO's, but double LU's. Larry

To: telecomguy who wrote (5121)	3/24/2000 1:35:00 PM
From: RetiredNow	Read Replies (1) \| Respond to of 14638

You know at these price levels, I am beginning to think you are right. Cisco is just so overvalued right now. In addition, it scares the shit out of me that Cisco has been late to the optical game. Still no real announcements in that arena, while Nortel is sweeping up. Here's a disclosure for you. I just sold 60% of my Cisco stock, that I have been holding for 3 1/2 years. I think I will be buying some more Nortel. :) Still Cisco has the business model...