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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: Rich Wolf who wrote (20421)	9/14/2000 7:10:15 AM
From: Michael F. Donadio	Read Replies (2) \| Respond to of 21342

KBRO reiterates $65 target....NEWS!!! by: turboconnect 9/13/00 10:43 pm messages.yahoo.com Msg: 23950 of 23955 Wrapup of Roadshow - STRONG BUY Sept. 13, 2000 KBRO ACTIONALERT issued 9/13/00 cgray@kbro.com Date of Last Report: July 20, 2000 www.kbro.com KBRO Trading Desk: 1-800-807-8723 WESTELL TECHNOLOGIES, INC. (WSTL /NASDAQ) CURRENT PRICE: $15 1/8 PRICE TARGET: $65 NOTES FROM THE WESTELL ROADSHOW Westell management was on the road today and yesterday marketing with buy-side accounts. Company reiterates its guidance for the current quarter. During meetings, the company reiterated its guidance for the current quarter, which includes CPE revenues of $65-70 million and EPS of $0.09. Verizon strike has no impact. During the quarter, the strike at Verizon (VZ $43 13/16) had little impact on orders to Westell. In particular, only one of the five units needed to provision DSL - the central office technicians - are unionized and actually went on strike. In addition, the company has started to see traction in the GTE footprint of Verizon, an account that was recently won as Verizon looked to standardize its architecture across all territories. Slowdown at SBC will have affect, but downside limited. The company did acknowledge the fact that the slowdown at SBC Communications (SBC $45 1/2) will have an affect on orders, but did say that this was not so large that other business could not make up for lost revenues. Orders from British Telecom ahead of schedule. The company has also seen significant traction at the British Telecom (BTY $114 15/16) account selling both DSLAMs and CPE to the U.K. operator. Our estimate calls for $15 million in transport revenues, a sequential increase of over 150% from the roughly $6 million in transport last quarter. We reiterate our STRONG BUY rating and our $65 price target. INVESTMENT CONCLUSION Shares of Westell, along with its peers, have come under significant pressure lately as investors have become increasingly skittish about DSL deployments. Of particular concern, the slowdown at SBC will have limited impact on companies like Westell. Despite this slowdown, however we remain bullish on shares of Westell, particularly at current levels. The company’s shares are trading at about 21x our 2001 calendar year EPS estimate, off over 60% from the 52-week high. The company will likely have a managed quarter and should enter the December period with strong backlog and visibility. We believe the current valuation is quite compelling and recommend investors buy stock ahead of a strong visibility into the fourth quarter. We continue with our STRONG BUY rating and $65 price target. kbroresearch.com A Buying Opportunity, Michael

To: Rich Wolf who wrote (20421)	9/19/2000 4:43:57 AM
From: I. N. Vester	Respond to of 21342

Rich, I agree with your discussion of the general market skitishness and the fact that large pocketed short sellers have been having their day. A few other remarks about the tltn merger. First, the cash from tltn was how wstl managed to buy the Castle Creek Convertable monkey off their back. That monkey would certainly have greatly added to the power of the short interests and it was imperative for wstl to deal with it. The CC monkey was a big reason that the stock languished below $10 for so long. Also note that the merger was strategic in allowing the company to put money into the cpi business rather than being so reliant on the postive cash flow from cpi. at least that's one of the ideas they had at the time, don't know how much they have subsequently invested in cpi. anyway, if they manage to spin off cpi at a much higher valuation due to being able to spend to expand that business over the past 6 and next 6-12 months, that's another big addition to shareholder value from the merger. the business is being run to maximize shareholder value in the mid to long term. with stocks like this in this kind of market you need to be really patient and accept that the institutions can be very short sighted and not know how to value tech stocks especially the small to midsized companies. adobe, idti, lsi logic are just a few other stocks i know of which went up 5-10 fold when their business plans worked out. the fundamental soundness of those plans was evident even while the stocks got pounded. those 3 stocks i mentioned above were cases where i 'knew' they were seriously undervalued but failed to get in or keep faith and buy more when they were beated down. This time i am buying into the weakness and will be patient enough to let the business plans work out, how ever many quarters that takes, the rewards will surely be quite rich. the company has to have solid business plans and execute them which they are doing. it would be pretty dumb for them to rush out to alter their sound business plans just because the institutions are stupid enough to overvalue efnt and undervalue wstl. that's like arguing that quality engineering doesn't matter, sell the cheapest product instead of 'over-engineering' it so that it really works. the products are best of breed and the business is being well managed. imho patient shareholders will be richly rewarded.