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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: Trey Yon who wrote (2144)	2/18/1998 11:40:00 AM
From: Dave Dickerson	Read Replies (1) \| Respond to of 7342

To all- A good post from the Yahoo TLAB string-bookmark http;//messages.yahoo.com/bbs?acti...m2&msgid=6cf20c$n2m$1@m2.yahoo.com for interesting Tellabs discussiions. Subj: Start Buying, this is moving fast By: reganizer Date: Feb 18 1998 8:24 A.M PST Reply To: Msg. 1 by YahooFinance Stock of the Day (Archive) Feb 18, 1998 Tellabs: On the Way to 2B by 2K The news this week that Tellabs will acquire Coherent Communications Systems marks another milestone in the tremendous success story for Tellabs (Nasdaq:TLAB - news) , a maker of telecom switching gear. Tellabs' revenues have grown from $258 million in 1992 to $1.2 billion in 1997, and the stock is up more than thirty-fold in that period. The company says it is easily on track to achieve $2 billion in sales by the year 2000, a goal better known around Tellabs as "2B by 2K." Tellabs is cashing in on the deregulated frenzy of competition in U.S. telecom, selling high-tech equipment that helps phone companies and other telecommunications service providers upgrade the performance of their networks. Its network transmission and switching products speed voice and data signals across lines, and its echo canceller technology improves call quality. Tellabs also makes products which enable cable operators to transmit voice and data signals over existing cable TV lines. The Coherent acquisition, announced on Monday, was generally praised by industry analysts. In addition to the cost savings from consolidating operations, Coherent's international focus will complement Tellabs' domestic sales strength, and the two will combine significant expertise in echo cancellation technology for future product development. The deal was valued at $670 million, nine times Coherent's sales in 1996, yet the stock-swap agreement is expected to be modestly accretive (meaning it should add to operating earnings per share rather than dilute them) in the first two years. Soundview analyst Chandan Sarkar said he expects Coherent to add a few pennies per share to the bottom line in 1998 and about 10 cents to 1999 earnings. If other analysts share his view, that would boost the consensus estimates to $1.76 in 1998 and to $2.30 for 1999. With the stock trading at $57.12 currently, Tellabs has a Price/Earnings ratio of 32.5 using '98 estimates. Analysts are predicting a long-term growth rate of 27%-33% for Tellabs, so the P/E is only slightly higher than the growth rate. While value investors often consider a stock "fully valued" when the P/E is equal to the growth rate, Tellabs has traded at a substantial premium to its growth rate in recent years. The company has established itself as a consistent performer, routinely beating analyst estimates by a few cents each quarter. It has profit margins that are fat and getting fatter, with the net hitting 21.9% in 1997. The high-flying stock of Tellabs was knocked down a notch in late-1997, as the Asian-inspired meltdown in tech stocks combined with speculation about a slowdown in telecom equipment spending. From a high of $65 last September, the stock retreated as far as $43 in January. But Tellabs CEO/founder Michael Birck appeared on CNBC in January after another strong earnings report to reassure investors that the outlook for capital equipment spending in the telecom industry remained favorable. The stock climbed back to $58 after Merrill Lynch upgraded the stock last Friday, setting up a possible breakout from its 5-month period of consolidation. Dave Dickerson

To: Trey Yon who wrote (2144)	2/18/1998 12:04:00 PM
From: Chuzzlewit	Respond to of 7342

Trey, ignore the charts, tape, stars, animal guts etc. -- they all mean nothing! If I had followed that kind of advice I would never had invested in TLAB at $40, $38, $46, $44 (those are the actual prices +/- fractions) that I paid, in that order during the last year. I haven't sold a single share, and on an annualized basis (IRR) I'm up about 40% for the past year. Interesting side-line: I heard that the company that owns some of those cable psychic services is going broke because of smaller revenues than anticipated. Hmmmm? Regards, Paul

To: Trey Yon who wrote (2144)	2/19/1998 2:21:00 AM
From: Mike	Read Replies (1) \| Respond to of 7342

TLAB is going for a run. The downward movement was unjustified. The purchase of CCSC will have to be evaluated at a further date. From the analysis that I have been able to complete TLAB may have done a great job on this aquisition. The only concern is that 75% of CCSC sales are outside the US. Have not been able to determine if they have any skeletons in their closet. For example are there any contracts in jepordy of being cancelled (not echo cancelled). If anyone has any info please post it. As far as the chart being a mess and not messing with the trend. I see TLAB going back to the 65 level as soon as we can break the resistance at 59 and then 60. The prospects for this company are great and I agree dont fight the tape. Get on the ride up now. To compare this to a USRX purchase by COMS could be true if the skeletons come out of the closet. IMHO and the analysis of SFE (Safeguard Scientific) the company that brought CCSC public is this will not be the case. All opinions respected, Mike MHatTrik@aol.com