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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: JimieA who wrote (21288)	6/3/2003 11:21:04 PM
From: Elroy	Respond to of 21876

How about..... LU is not a monopoly. Telecom equipment is a very competitive indsutry. Even during the gold rush times of the late 1990's, the best net margin LU ever got was 9%. In slower times (this decade) and considering the huge net interest expense as a result of LU's heavy debt load the best net margin they may see in the next few years is 6%. The telecom equipment industry is down again in 2003, perhaps flat in 2004, and then likely to grow (at best) 5% per year for the next decade. These are not attractive growth characteristics. So you've got a slow growing, very competitive industry and a company that may (if it executes really well) get to 6% net margins. When CSCO is a monopoly in enterprise networking, currently sports 22% net margins and has superior growth potential (data versus voice) to LU over the next decade, why would anyone want to own LU rather than CSCO for anything other than a short term trade? Elroy