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 : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (5768)	2/4/1998 4:52:00 PM
From: Chris	Respond to of 42787

will post my multiple charts to go along with your analysis..

To: Judy who wrote (5768)	2/5/1998 3:28:00 PM
From: broken_cookie	Read Replies (2) \| Respond to of 42787

Judy and others interested in BAY trades, I would/will post anything from analyst meeting if possible. Called IR and they said it was analyst only meeting, no conference call, no press releases planned. Talked to my broker at Solomon Smith Barney. They have a BAY analyst and he'll fax me anything the guy has to say about the meeting. No guarantees there will be anything. I know you have already left, but when you return, what would your source have been?

To: Judy who wrote (5768)	2/5/1998 4:54:00 PM
From: broken_cookie	Respond to of 42787

Judy and Chris, Re: BAY. YUCK!! See ya. From the street dot com Top Stories: Bay Networks' CEO Warns of Short-Term Weakness By Kevin Petrie Staff Reporter 2/5/98 3:51 PM ET Bay Networks' (BAY:NYSE) recovery might take a short hiatus. "I don't want the Street to get too optimistic about this quarter," CEO Dave House said Thursday morning in an interview in his suite at the Inter-Continental Hotel in midtown Manhattan. However, he remains "very optimistic" about the second half of the fiscal year ending in June 1998. After the market closes Thursday, House and a cadre of top executives will huddle with sell-side and buy-side analysts at the same hotel, one of his few such meetings since taking over at Bay in the fall of 1996. He says that he intends to forge stronger ties with the investment community, which has complained about a lack of access. "I need to have a better relationship with the Street." But House has had plenty to keep him busy. The Intel (INTC:Nasdaq) veteran and former lieutenant of Andy Grove has executed a rescue operation. For instance, he finally glued together Bays' Wellfleet and SynOptics units, which had merged clumsily in October 1994. During his tenure, Bay topped the First Call consensus estimates every quarter in calendar 1997, and its stock soared 165% to 41 on Oct. 9 from 15 1/2 on Mar. 24. The Asia tech flu then roiled Bay's stock, although it bounced up in mid-December. After early gains in the day, at 2:30 p.m. Thursday Bay was down 1/2 at 29 5/8. Now, investors who were spooked recently at his veiled warning of "seasonal" slowness this quarter want to know what's going on. While the long-term story looks sound, the Street has already tempered its short-term outlook for Bay. The First Call consensus for the current quarter has been reduced to 28 cents per fully diluted share from 30 cents per diluted share two weeks ago, according to the Baseline data tracker. Analysts still expect a strong June fiscal year -- estimates are $1.09 per diluted share, compared with 59 cents per basic share in fiscal 1997 (excluding significant merger, restructuring and other charges; diluted earnings were not available for fiscal 1997, due to a change in accounting practices since that time). Sipping coffee, House tromped on his deadline for the next meeting as he explained Bay's technology advantages and the outlook for the quarter. Among his major points: He defined the "seasonal" problem. In the fiscal third quarter ending March 30, many corporations are busy installing equipment they bought in the fourth quarter with year-end budget allocations. So they are slow to purchase new computer-networking products, House explains. House says Bay's fourth quarter ending June 30 will be much stronger because corporations with the same fiscal year will hustle to spend their annual networking budgets before taking a summer vacation. A product transition likely will add to the fluctuation in revenue. This quarter Bay ships new products for corporations in two categories, the BayStack 350 and Accelar 1000 lines. The 350 devices are "switches" that ship digits across local-area networks, while Accelar technology performs more complex navigation tasks at speeds and prices that challenge Cisco's (CSCO:Nasdaq) dominance with its routers. It's a plan common to the industry -- cannibalize old models with the new ones. House says the strategy is working well. "We have obsoleted the 350T" -- an old cut-rate 350 model that fueled much of Bay's revenue growth in prior quarters. The question is how quickly Bay can make money with new technologies. "The new 350 series, I'm pretty confident in," House says. However, "you could always have problems with product transitions." Bay has regained the loyalty of employees. But the company is only "half there" in regaining the loyalty of customers, House says. In particular, Bay needs to develop relationships with "C-level" folks at corporations -- CEOs, chief technology officers, and so forth. "That's been Cisco's strength." House intends to change that. Earlier in the week, he attended the World Economic Forum and met with the chief officers of Bay clients that include Chase Manhattan (CMB:NYSE) and CitiCorp (CCI:NYSE). Cisco, the behemoth to beat in networking, will feel real margin pressure this year as the sales growth of its profitable routers slacken further and customers turn to hybrid "router-switches" instead. Bay's market cap is $6.4 billion, putting it well behind industry leader Cisco's $65 billion.

To: Judy who wrote (5768)	2/6/1998 2:22:00 PM
From: broken_cookie	Read Replies (3) \| Respond to of 42787

Judy re BAY, This is the SSB analysts take on the meeting. Summary: Near term fundamentals on track. Stage set for June quarter earnings surprise. New product momentum is strong. Reiterate our outperform rating and $35 price target. Earnings forecasts unchanged. p/e 98 27.3x p/e 99 18.4x The meeting: Investment Conclusion Bay Networks held its East Coast Financial Analyst Meeting in New York City lately. We viewed the message BAY management delivered as the most clearly defined and aggressive since the merger in 1994. Dave House's goal is clear: "To be the fastest growing co. in the networking sector." Bay Networks has clearly defined and overcome some of the obstacles in their path and continues to execute toward the operating model, revenue growth and market share goals. We reiterate our outperform rating and 35$ price target. Key Points: (1) Strategic vision in place. The focus of the presentation was BAY's goal to be the fastest networking company; fastest in the data networking industry sector with growth that outpaces the overall growth in the sector. The path to achieving success was well articulated and comprised of four initiatives. 1. To be the first to market with hot products. This is being accomplished through parallel product development programs and strategic acquisitions. 2. Broaden the customer base through improved company branding and enhanced reseller partner programs. 3. Deeper penetration into existing customer base by focusing service and market branding at the CXO level. 4. Penetrate carrier accounts by introducing new capabilities such as Virtual Private Networking, IP Telephony and cable modems. Evidence indicates that the plan is in place and working. New product sales (products introduced in the previous 12 months) attributed to 59% of sales in the December quarter vs. 41% a year ago. BAY's customer base has grown by over 1000 in the last two quarters. BAY has recently achieved some strategic tier 1 customer account wins, including Bloomberg, as the end to end vendor of choice.This was the strongest BAY presentation in 4 years and demonstrates that the company continues to execute. (2) Business fundamentals are strong. While the company faces weak seasonal trends in the March quarter, we believe current quater business momentum is solid. We are confident of our estimates for the near term and calendar 1998 based on three factors: 1. Extraordinarily good demand for the Accelar product is exceeding expectations, which gives us confidence for the near term estimates and the likely potential for an upside suprise in June. 2. Centillian business in Europe continues to contribute to sequential and Y2Y revenue growth. 3. Next generation 10/100 workgroup 350T will hit the market the market in March , which will contribute to gross margin expansion. The company also indicated that inventories were slightly down from the december quarter and that operating model objectives were attainable. Reaction: from Briefing.Com Bay Networks Inc. (BAY) 30 5/8 +5/8: Adams Harkness raises its rating on computer networking concern from "market perform" to "attractive" as gross margins are expected to improve by 2% to 3% to about 55% by mid-year; also operating expenses expected to expand less rapidly than revenues.....