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

To: ELH1006 who wrote (20959)	10/20/2000 1:48:50 AM
From: Mark[ox5]	Respond to of 21342

Eddie Sometimes we need to seperate the co. from the stock. EFNT has done everything they promise. Their main flaw is gross margins; I only have 2 stocks with GM below 50%, EFNT being 1 of them. Until this quarter EFNT is basically on the identical 1 year revenue growth chart as JNPR, but the perception of the "modem" industry (even though CPE is not "modem") and the gross margins are the main differences. Is it worth $65 Billion of valuation? The market says right now it is... I dont think it is. That said, they have improved gross margins 1200 basis points (12%!!) in 6 months. That is phenomonel. I posted continously, ESPECIALLY with CONTINUED component shortages... that i doubted EFNT could make another 6% improvement in GM this Q... I was looking for say half of that.. 29%. I am surprised. (happily) The problem right now is deployment (however Self install seems to be finally a factor)... and perception of the sector. With the company specific blowups of past few days , the death of all CLECs in about 3 weeks, and SBC rollout problems, the entire sector has been screwed. I am "hoping" this is "shakeout" time and at some point the cream rises to the top and the market gives those companies higher mutiples.. I am not asking for Price to sales of 200 like fiber optics, Price to Sales of 150 like PMC Sierra, Applied Micro, or whatever.. Im asking for a nice PS of 20-25.... My only concern this Q would of been revenue sequential growth but considering the SBC issues, the environment, and peers performance (i.e. WSTL) in that issue, it is a lot better than it looks on first glance. Once again, the stock has been dissapointing as hell but that is because it is just lumped in as "those damn stinking DSL stocks"; it reminds me of "internet" stocks in 97.. they all did the same thing back then... or "B2B stocks" in late 99.. they are all the same basically Ventro, Ariba, its all the same. Eventually the market made sense of it.. I can only pray they do this in DSL and reward the Globespans and Efficient's and don't label them all Copper Mountains and ummm.. Westells. Anyhow, later.. this is a very narrow market.. if you dont own what i call the "God 20 Tech" stocks you are unable to make consistent money in this market.. its either blue chips like Sun Micro, Nortel, EMC or New Economy like PMC Sierra, Ariba, Brocade, Juniper .. and other than that group of 20 everything else is tossed around like sh**. Its the effect of the hundreds of thousands of $2000 Etrade accounts... lemming effect 1000x worse than 5 years ago. Not to sound arrogant but we are sheltered here at SI with good posters and generally great information exchange. Take 20 minutes to read a Yahoo message board on most stocks and you will see what the "typical" qualifications are of the people you are investing WITH. You not only have to guage your company that you invest in, but consistently guage how all the lemmings you are investing in will react. Plus the institutions are not much better in their behaviour. It has become so much more psychological than fundamental in many ways... need to exchange Finance Degree for Psychology to play on the Street. Mark