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 : UCOMA UnitedGlobalCom -- Ignore unavailable to you. Want to Upgrade?

To: Katie Kommando who wrote (459)	7/8/2000 1:51:10 AM
From: Katie Kommando	Respond to of 489

Morningstar.com UnitedGlobalCom Is a Fine Long-Term Pick By Leah Zell, Fund Manager Acorn International (Nasdaq: ACINX - news) manager Leah Zell has a habit of identifying fast-growing small- to mid-cap stocks before her peers. And it shows: Acorn International is among the foreign-stock category's best, even meriting a place in the Fund Analyst Picks for the foreign-stock category. In today's edition of Fund Manager Picks, Zell highlights UnitedGlobalCom (Nasdaq: UCOMA - news). Why Zell Likes UnitedGlobalCom ``UnitedGlobalCom owns cable-television franchises in 23 countries, making it the largest broadband communication company outside the United States. Its most important asset is a 61% stake in United Pan-Europe Communications (Nasdaq: UPCOY - news), the second-largest cable operator in Europe, with 5.8 million subscribers at the end of last year. It also controls a broadband portal named Chello, whose IPO is on hold pending the outcome of discussions with Excite@Home (Nasdaq: ATHM - news), and cable assets in Latin America and Australia. ''Cable will play a key role in the new communication services to be introduced over the next several years. In addition to basic telephony and high-speed Internet access, which are being rolled out across Europe now, offerings like pay-per-view and on-demand programming hold the potential of increasing revenues per subscriber dramatically. In many countries outside the United States, where fixed-line telephone service is poor and PC ownership low, cable represents the easiest path to upgrade the communications infrastructure of the average consumer. ``Last weekend, UnitedGlobalCom announced it was merging with most of the international cable assets of Liberty Media, controlled by legendary cable pioneer John Malone, of TCI fame. Liberty's contribution of $5.3 billion in properties includes 25% of TeleWest Communications (Nasdaq: TWSTY - news), the second-largest U.K. cable company. In Latin America, the combined entity will pass 6 million homes and have 2.2 million subscribers. The deal brings UnitedGlobalCom an improved balance sheet and unparalleled market muscle, which will allow it to play a leading role in the consolidation of the industry overseas going forward. ''UnitedGlobalCom had been in the Acorn International portfolio for over five years until March of this year, when we sold our remaining stake for about $93 per share because we felt the valuation was excessive. One month later, we began buying it back at less than half the price. The merger ratio with Liberty Media implies a valuation today of about $70 per share after the transaction, a figure that should grow over time with the number of subscribers and the average monthly bill. UnitedGlobalCom fits the Acorn International investment style because it benefits from a long-term secular growth trend. While it had become temporarily too expensive for us to hold, it is now back at levels we consider highly attractive for the patient investor.`` Kunal Kapoor, an analyst at Morningstar, contributed to this article. He can be reached at kunal_kapoor@morningstar.com. No portfolio-planning questions, please. Disclaimer: The information provided and opinions expressed here are those of the Forum guest and are not advice or recommendations of Morningstar, Inc. All information and opinions are for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. In addition, the views and opinions expressed in this article may change based on market and other information.