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.

Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: Mark Fowler who wrote (7067)	5/22/2001 8:15:22 AM
From: craig crawford	Respond to of 57684

Tuesday May 22, 7:34 am Eastern Time Trsy's O'Neill-U.S. slowdown over, economy stabilized NEW YORK, May 22, Reuters - U.S. Treasury Secretary Paul O'Neill said on Tuesday the rapid unravelling of the U.S. economy has ended and conditions are in place for a recovery over the coming year. ``The slowing was over by the first of February, and now we are just kind of bouncing along something between half a percent real growth to 2 percent real growth,'' O'Neill said in an interview on Bloomberg Television. The aggressive interest rate cuts by the Federal Reserve - 2.5 percentage points since early January - have been ``very constructive,'' O'Neill said, and this has laid the groundwork for growth to move back toward 3.5 percent to 4 percent over the next six to 12 months.

To: Mark Fowler who wrote (7067)	5/22/2001 11:07:17 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

From Briefing today: McDATA (MCDT) 39.30 +1.04: This storage area networker (SAN) is bidding higher today on the heels of favorable industry comments from Merrill Lynch. Specifically, the firm notes IDC research which now estimates the 2004 fabric switch market at $4.5 billion. This is a sizeable increase from estimates two years ago which placed the combined markets for fabric and switches at $1 billion. The implications are that it's difficult to ascertain the precise market opportunity in storage area networking, but suffice it to say the market will be very big. MCDT primarily addresses the high end SAN market with what are called backbone director-class switching devices. MCDT's primary competitor is Brocade Communications (BRCD) which was first to address the SAN market and has a stronger market position. The competitive SAN environment raises two investment questions for MCDT: 1) can MCDT establish a market leader position in storage area networking, or alternatively 2) is the market big enough for more than one big winner as an investment? Until proven otherwise, Briefing.com would approach MCDT with an eye towards the second perspective. MCDT looks attractive operationally and has targeted a compelling end market -- those dynamics alone make the issue worth watching. Nonetheless, the shares trade at 126.7x estimated 2001 earnings and 66.6x 2002 numbers. Those numbers suggest a market leader premium which may not be the appropriate view at this time. While we acknowledge the underlying strength of MCDT's business, Briefing.com would like to see the fundamentals catch up with current prices.Michael Ashbaugh, Briefing.com