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

To: jas cooper who wrote (2894)	1/30/1998 4:41:00 PM
From: Chris Stovin	Respond to of 18016

Today's Ottawa Sun..... Just another wonderful article on Newbridge....Yikes January 30, 1998 MAGIC TOUCH WEARING OFF NEWBRIDGE NETWORKS By STUART McCARTHY -- Business Editor ÿ Bargain hunters grabbing Newbridge Networks shares as they hit a 52-week low yesterday "could be in for a rude awakening" an analyst warned. ÿThe Kanata maker of high-speed telecommunications and network management equipment has seen shares fall from a $95 high a few months ago to less than half of that value after an acquisition fell flat and hurt revenues. ÿThe company will announce its next financial results after the close of markets Feb. 24. ÿEarlier this week, Newbridge unveiled a strong marketing and development alliance with 3Com, to push Newbridge's technology into the local area network/desktop arena. ÿNewbridge had tried to go that route alone with the $140 million purchase of UB Networks last year, a disappointing move that recently resulted in the layoffs of 280 people from the troubled division. ÿYesterday, shares hit a new low for the year of $37.50, below the previous low of $38.25 on the Toronto Stock Exchange, but rallied back following a presentation by Newbridge officials to ScotiaMcLeod brokers and clients in Toronto. ÿShares peaked at $41.65 but closed the day down 20› at $40 with 2.7 million shares traded. ÿ"We've got a situation where the stock is very cheaply valued and basically we've got bargain hunters out there," said Rob McLellan, an analyst with SBC Warburg, Dillon Read. ÿBut McLellan, who has usually held a strongly positive position where other analysts have downgraded the company, last week dropped Newbridge from a buy to neutral. ÿMcLellan said he did so because of a "possible indication of a slowdown in ATM (asynchronous transfer mode) revenues for next year." ÿWhile other analysts reduced their earnings estimates for Newbridge for the quarter, McLellan said a lot of analysts have kept their recommendations -- in most cases a buy -- in place. ÿ"If there is any hint when they give guidance to analysts of a slowdown in ATM revenues, it could get very ugly," McLellan said. ÿHe said the situation he's catching wind of is that U.S. telephone carriers, while still planning to overhaul their networks into ATM-based ones, will slow down the pace at which they will do so. ÿ"Until that's clarified, we're just warning of the dangers of bargain hunting," McLellan said. ÿNewbridge spokesman Paul Goyette said the company routinely doesn't comment on stock activity and was further confined by the fact that the company is in a quiet period as the quarter ends. ÿAs to whether Newbridge is getting the same view of the market that McLellan is, Goyette said, "We'll have to hold off on that until the numbers are released, when we will provide guidance to analysts and stockholders."