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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (2504)	12/1/1997 8:29:00 AM
From: kanta	Read Replies (2) \| Respond to of 18016

Looking at Newbridge, there does not seem to be anything too too drastically wrong with the fundamentals. A simple way to summarize their situation is to say that their core business is still very very strong in revenue growth and their profitability is still high (63%). The only thing that has pulled them down is the UB business they tried to turn around. However, they have decided to give up on UB. The resulting loss on the capital investment on UB will effect next quarter results if they happen to sell it off in this quarter. But they have just recently sold a substantial position in Broadbands to Nortel. The resulitng gain in Broadbands should set-off much of their loss in the UB fiasco. I Believe that the current gain from Broadbands is the reason NN has decided to swallow their losses on UB in the coming quarter. Both will negate each other and should not effect results for Q3. I believe alot of investors are panicking over the set-back that NN has had with UB. But the whole story boils down to the fact that NN is still a leader in their feild, the market they dominate is still strong, they have made one bad investment which is currently the focus of interest. However hey have made one good investment which will off-set the UB fiasco somewhat. I believe the company has learned it's lesson- to concentrate on it's core business and is presently a very strong buy. Their share price has bottomed at the $60. level and seems to have a strong support level at the current price. I believe once the market gets over the current jitters over UB (which are overplayed in the media) the company's fundamentals are strong and it should find it's way back to the $70-75 market. For a stock that is very volatile, this seems like the best opportunity to buy a company which has a "record back-log of orders"- is very clearly a dominant in their field and is on their way to unloading some of their burden in the next quarter (UB) and also on their way to make a substantial gain on the sale of one of their investments (Broadband s) next quarter. The start of the coming week should reflect some of the positives on NN. Kal