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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Robert who wrote (9242)	1/15/2001 1:23:40 PM
From: somple1	Respond to of 14638

Read a Report by National Bank dated Dec 2000. Estimated earnings for 2001 US$1.00, and US$1.30 for 2002. At US$30, the P/E is 30 times, and the PEG is 1. Do we have a growth stock whose PEG is less than 1??Unless the estimated earnings are too high. Perhaps we understand now why NT has been beaten down so badly. Most of its clients are telephone companies. Their cash cow used to be long distance calls. Just look at the rates of those telephone cards, you will understand why revenue from long distance calls will decline. The rate to call US from Toronto is as low as 5 Canadian cents a minute (no connection fee, no monthly fee, any time/any day). The phone companies have to find a new cash cow - transmitting data instead of voice. Transmitting data requires more bandwidth. There is where NT will benefit. However, the immediate economy seems sluggish. The time table to place more orders for equipment with NT may be pushed behind a bit (a few quarters??). But the future is still more bandwidth. Imagine that your computer is down, you must feel that you have lost something. We just can't live without a computer once you have it. That is my 2 cents on bandwidth and NT. I will continue to average down, and plan to hold it for at least 2 years. Present chart support is at US$30.

To: Robert who wrote (9242)	1/15/2001 1:40:14 PM
From: zebraspot	Read Replies (2) \| Respond to of 14638

Agreed that the PE's are higher for growth stocks than they used to be. However, we are not in the stage of the market, IMO, where those old PE levels are the new order of the day. We are getting a bounce where many will semi-believe the dreams of 2000 again(excluding the real excesses), if only for a few weeks/months. Once this rally gets underway -- and I and others (like Don Hays, who has called this whole correction accurately since about 4/99) believe it has started. NT can easily pop to mid-40's quickly - a price that was considered dirt cheap as recently as, when, October/November? And, the institutions will go to an NT -not the small caps like RCN, NOPT, and others that have already bounced to the tune of a double or triple in the past few days. Perhaps, later this year, after this happy-days-are-here-again rally fails, "normal" PE's will come back, and, all things being equal, a 20-something multiple for NT, et al will be the case. Not yet. Then again, if earnings are disappointing, we get mired in the high $20's.