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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: KevRupert who wrote (15854)	8/28/2000 11:37:41 AM
From: Jeff Jordan	Read Replies (1) \| Respond to of 21876

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To: KevRupert who wrote (15854)	8/28/2000 8:30:48 PM
From: KevRupert	Read Replies (1) \| Respond to of 21876

Pick of the Week: Lucent Technologies cnbc.com Aug 28 2000 7:00AM ET More on Bargain Bin... Pick of the Week: Lucent Technologies By Eric C. Fleming Technology Reporter WHO: Ariane Mahler, analyst at Dresdner Kleinwort Benson STOCK PICK: Lucent Technologies Inc. {LU} CURRENT PRICE: $40.687 12-MONTH PRICE TARGET: $80 VALUE-ADDED BENEFITS: With the spin-off of two of its units valued together at about $40, investors essentially get the parent company for free. Battered Lucent Technologies Inc. {LU} is a rocket with a slow fuse, says Ariane Mahler, analyst at Dresnder Kleinwort Benson, who rates Lucent a long-term "buy." Analyst Opinions: Lucent Strong Buy 11 Buy 11 Hold 10 Sell 0 Strong Sell 0 Source: Zacks Investment Research, Inc. "You can't buy anything better, it's going to be like Nortel, with the same breakdown of revenue," says Mahler. "The main business of Lucent is data, voice, optical and wireless." Lucent hasn't acted like Nortel this year, or any of its rivals, for that matter. Nortel Networks Corp. {NT} has gained 63 percent, JDS Uniphase Corp. {JDSU} is up 55 percent and Corning Inc. {GLW} has climbed 132 percent. To be sure, Lucent has taken its fair share of hard knocks in recent months, down 46 percent for the year after a one-two punch of profit warnings for its first-quarter and its July apology that its next two quarters would also miss expectations. For those that are patient, however, Lucent may be worth the wait. Mahler sees Lucent's shares gaining momentum after about six months, doubling in about a year's time. Of course, that also means that Lucent may be dead money for the next three to six months, says Mahler. "I won't recommend to people to buy it right away." Are You Willing to Wait a Year for LU? All this pain stems from Lucent not being able to build enough of the next-generation optical networking equipment that telcos crave, while having too much of its revenue tied to older technology, with less eye-popping growth rates. The spin-off off of its microelectronics unit, tentatively planned for next year, may have investors smiling again, says Mahler. Lucent's reputation on Wall Street after all this isn't worth much. Mahler is waiting on a plan to get Lucent back on track: waiting for more clarification on its restructuring, and hoping for Richard McGinn to get his walking papers. On top of being in a hot sector, Mahler sees Lucent's plans to furnish shareholders with a spin-off of its most promising business as a nice perk. Mahler's math works like this: Microelectronics, valued at $35 a share, plus its enterprise unit at about $5 a share, equals Lucent's current share price. With the microelectronics business unfettered, "it's going to do much better on its own," says Mahler. "There are no conflicts of interest and performance won't be diluted." ad's comments: In my opinion -- I had a great time with 3Com and its spinoff of Palm. Patience was required, but money was available to the patient. This Lucent story sounds very familiar -- if one has the ability to be patient.