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

To: Wendisman who wrote (31397)	8/7/2000 12:32:59 PM
From: Wendisman	Read Replies (1) \| Respond to of 57584

This is good news.... biz.yahoo.com Houston, we have a bottom.

To: Wendisman who wrote (31397)	8/7/2000 12:39:24 PM
From: American Spirit	Respond to of 57584

An Opportunity in AT&T's Fall now on sale at 30 5/16!! By Mitch Ratcliffe, Columnist Venerable AT&T has seen its shares plummet in the last five months. All the signals say it's time to buy. Long distance as a business is in poor favor with investors these days. But that lack of a loving feeling for the sector has provided some good opportunities. Take AT&T (NYSE:T - news) for instance. Whether you like it as a company or not, it is one of the few firms that has been around for 100 years, with all the attendant ups and downs. The company will certainly come off its recent lows. At Thursday closing price of 30 5/8, the company's price/earnings is hovering near 16 -- a bargain even in today's post-tech correction market contrasted with the sector-wide average of 34.27. Moreover, Thursday's price is just $5 above the book value of AT&T's assets. The price/sales ratio, at 1.58, is ridiculously low for a company that traditionally returns between $2 and $3 a share to investors annually. Long Distance Makes Earning Money Harder Even as the core business shrinks -- consumer long distance, while increasing in usage is falling in cost -- AT&T has implemented a defensible alternative, focusing on bringing broadband services to the home. Unlike WorldCom (Nasdaq:WCOM - news), which I see as a winner in the broadband arena on the backbone, moving massive amounts of data from place to place on the Net, AT&T has staked out the last mile and will certainly be a major player. The company already has about 750,000 broadband-cable customers currently, roughly 20% of the total home broadband market in the US. But, because it can also play in the digital subscriber line (DSL) business, the telephony-based alternative to cable modems, AT&T is one of the few companies that has retained the agility to move from one market to the other as they develop. Likewise, AT&T is still in the midst of the integration of TCI cable into its business. It has been able to centralize a lot of customer-service operations and will continue to implement up to $2 billion in savings over the next 12 months. This should raise the operating margin by approximately one-half percent. Consensus expectations for 2001 show an increase of approximately 6% in dividends paid as a result of savings and increased revenue. Rejoining Customer Service and Operations During the past half-decade, most of AT&T's senior managers left. Most were attracted to Net startups and competitive carriers, but the company also shed numerous middle managers and, importantly, researchers and those possessed of the corporate memory that had been created since divestiture in 1984. What remains to be seen is, whether under Mike Armstrong the company has retained enough sense of itself to capitalize on strengths. Though Armstrong has emphasized the focus on customers and increased efficiency, he has largely ignored the inherent strengths established by AT&T's 70-year history as a government-mandated monopoly. For many, many years, AT&T was the only source of phone service, and within the network operations there was a serious commitment to quality, even if the customer-service interface was pretty awful. Now, based on my conversations with present and former AT&T execs, I think AT&T has created a huge gap between the customer-service organization and the network-operations people who hold all the services together. This is evident when you call the company and ask a technical question -- 20 years ago, you would have gotten an unintelligibly technical answer, but today you get a customer-service agent with no technical knowledge. Where AT&T can succeed -- and does to some degree in its business-services segment -- is in remarrying these two sides of the business. Armstrong isn't a ``phone guy''; he took the company too far from its network core. But now, with the help of AT&T Consumer CEO John Zeglis, he is correcting back toward a compromise that should operate more effectively. At today's price, I would be adding AT&T regularly to my portfolio until it reaches $50 a share. After that, I would play the downturns to increase holdings and reinvest profit in the stock. Ratcliffe is vice president and editor-in-chief of the ON24 Network, a personalized financial broadcast network for individual investors. He is also longtime executive and investor in the technology industry. Ratcliffe's insights and analysis of the high-tech industry will appear twice each week. He does not hold a position in any of the companies mentioned. Positions can change at any time.