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.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (23427)	10/2/2000 8:18:27 AM
From: Lucretius	Read Replies (1) \| Respond to of 436258

pnf charts telling you about growth now? (vbg)

To: Jorj X Mckie who wrote (23427)	10/2/2000 9:32:48 AM
From: LLCF	Read Replies (1) \| Respond to of 436258

Well, upgrades in the wireless space... this may help today: Wireless Stocks: Drop in Valuations Overdone; Long Term Buying Oppty 07:25am EDT 2-Oct-00 Goldman Sachs (Barry A. Kaplan) AWE NXTL NXTP USM PCS WWC Goldman, Sachs & Co. Investment Research Wireless Stocks: Drop in Valuations Overdone; Long Term Buying Oppty Barry A. Kaplan (New York) 1 212-902-6847 - Investment Research Denise Molina (New York) 1 212-357-3518 - Investment Research ==================== NOTE 7:01 AM October 02, 2000 ==================== WHERE ARE THE OPPORTUNITIES: Acknowledging that the stocks have come unduly under pressure, where are the best opportunities. Clearly many of the names are trading at highly attractive values, however, we would highlight a few names in particular: NEXTEL (RL)-GREAT BUSINESS MODEL; SOMEWHAT INSULATED FROM COMPETITION; ATTRACTIVE PARTNER: Nextel (and Nextel Partners) should be to some degree insulated from competitive pressures facing other carriers since Nextel focuses almost exclusively on the business market with a product that is unique, while many other operators are focused more on consumers and retail distribution. We believe that Nextel's unique product (direct connect and cellular phone combined) creates significant customer dependency. This continues to be the key to Nextel's industry leading low churn (customer disconnect rate) and high ARPU (monthly revenues per customer). With virtually the best execution in the industry, and at roughly $200 per covered pop, 13.7x 2001 EBITDA (an EBITDA which is essentially doubling every year for the next couple of years, and a 46% discount to our DCF value, we believe the stock is extremely attractively valued. Nextel Partners also attractively valued is trading at $235 per covered pop and 42% to its DCF value. AT&T WIRELESS (RL); GREAT VALUATION; OUTSTANDING EBITDA GROWTH: Given its national scale, rich spectrum, high brand equity, we believe AT&T Wireless is in an excellent competitive position. Strong subscriber growth has been a result of the company's successful marketing of new and creative programs such as the recent Digital One Rate junior plans, targeting a new customer segment with the traditional high end program. Recently the company raised churn expectations for the quarter, but did not lower expectations for net additions. This essentially means that disconnects were higher than expectations but also that new customers were higher than expected. We believe that through increased customer care programs and network quality improvements, the company will be able to manage its churn rate down to industry levels. In the meantime cost control remains quite good, and progress on reducing incollect roaming expense is ahead of schedule. We think the stock is very attractive trading at $211 per covered pop and only 9X 2001 EBITDA. With huge near term EBITDA growth and a longer term expectation of about 30% EBITDA growth per year over the next several years, and a 48% discount to our DCF value, valuation is very attractive. SPRINT PCS (MO): Although we do not have Sprint PCS shares on our recommended list, we believe that the recent decline in the company's share price has created an attractive buying almost on par with our recommended names. The company recently lowered expectations for 3Q subscribers from at least 900K to 800K net subscriber additions and increased expectations for churn to the mid to high 2% level. We believe that the subsequent 20%+ per day 2-day consecutive decline in the stock price was largely overdone. Although, we believe that the company experienced some softness in demand during the quarter, most of the problem was from involuntary churn, and we believe that the company can regain traction, possibly as soon as the fourth quarter. We believe that the causes for the softness were extraordinary and can be resolved going forward: 1) the company's 9 month old pre-paid like program (ASL, account spending limits) began to go through its first churn cycle, this impact should smooth out as the subscriber base on this program grows and 2) higher level issues such as the absence of a CEO and breakup of the WorldCom merger may have distracted the company's focus. The stock is currently trading at $250 per covered pop and 56% discount to our DCF value. Finally we would mention our other recommended as quite attractive values, VSTR, WWCA, and USM. DAK