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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Trumptown who wrote (30247)	7/21/2000 11:57:26 PM
From: Tradelite	Read Replies (1) \| Respond to of 57584

Sting-Ray...yours is the only voice I can find some agreement with at this point.....your advice to maybe "step aside" seems correct, especially with so many predictions that next year will be a bad year for stocks, so why blow all your money this year?....this trading stuff isn't worth the risk in our current environment, altho I'm right in there doing some along with everyone else, darn it. To beat a dead horse, LU sure didn't look buyable today for even a single minute. Bounced as predicted and then flopped slowly all day. It made sense that a second wave might be coming after this stock made a triple-bottom in the 51-52 range. But LU is still worth owning....if you can get it at the right price....what that price is will take time to figure out. Here's the news in today's IBD about LU, paraphrased somewhat for brevity: LU shares have slipped about a third off their all-time closing high on Dec. 20. The lowered outlook for this quarter comes as rivals such as Nortel and Alcatel have taken biz from LU because they were able to deliver products quicker. Ironically, the growth of those rivals is good for LU's $4 billion microelectronics unit, which LU recently confirmed after many rumors that it will spin off. LU will sell 20 percent of the company in an IPO planned for next year. The other 80 percent will be distributed to LU shareholders. Microelectronics was in the tricky position of supplying both LU and its parent's rivals. It makes abaout three quarters of its unit sales to LU rivals such as Nortel, ERICY, NOK, and CSCO. That conflict is one reason for the spinoff. The unit's exec VP said, "We'll continue to treat LU as a very significant customer, and we'll continue to treat our other customers as very significant customers.....These cuxstomers will feel more at ease doing business with us than they do now." The spinoff's chips go up against TXN and BRCM and ST Microelectronics NV...... But the really fast-grower is optoelectronics, including the lasers and filters that go into fiber-optic gear. The unit did $1 billion in optoelectronic sales over the last year, up 80 percent over the previous year. LU hasn't valued the spinoff. But Ching (a Merrill Lynch analyst) expects the spinoff to do about $5.5 billion in sales next year, and it could be valued much more highly than LU. "Semiconductors and optoelectronics are among the highest multiples," Ching said. "Those companies are trading anywhere from four to 40 times next year's revenues." (Tradelight here is wondering where LU's price will be between now and this predicted spinoff, which seems way off in the future.)