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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Immi who wrote (45737)	4/29/1998 10:14:00 PM
From: gbh	Read Replies (1) \| Respond to of 61433

Immi, ask and yee shall receive: Silicon Valley: H&Q Conference Notebook: Newbridge, Ascend and Fore By TSC Staff 4/29/98 5:05 PM ET SAN FRANCISCO -- The sooner Newbridge's (NN:NYSE) old technology dies, the better. Newbridge Vice Chairman Peter Sommerer made that plain early Wednesday at the Hambrecht & Quist Technology Conference. An older product line called TDM, still almost 40% of revenue, likely will stop growing. TDM helped Newbridge disappoint Wall Street yet again in the January quarter. Sommerer expects TDM to fall to 20% of revenue, but the company won't withdraw from the market. "He basically said we're going to keep market share in a dying business," laughs one investor. But the stock traded higher Wednesday after Sommerer explained what will drive growth -- so-called "frame relay" and "asynchronous transfer mode" or ATM boxes, which move digital chatter through the core of a phone company's network. A single box can carry five-sevenths of the entire phone traffic in the U.K., according to Sommerer. And carriers have only begun to buy. "Newbridge is in a wonderful position" if carriers swing to ATM in full force, says the investor. Another pro shies away from Newbridge. "To jump in with that much exposure is kind of risky," says analyst John Golden with John Hancock Funds. He isn't invested in Newbridge, although he likes its new ATM gear. Golden adds that another threat is the severe competition from Ascend (ASND:Nasdaq), whose frame relay ATM boxes are winning lots of contracts with phone carriers. Newbridge shares were up 1 15/16 to 28 3/4 Wednesday. Ascend Speaks Quietly, Carries a Small Shtick If brevity is the soul of wit, Ascend CEO Mory Ejabat is the wittiest guy around. His prepared remarks lasted just eight short minutes. That left H&Q analyst Joe Noel with the uncomfortable task of having to fill the rest of the half hour. But rather than open the floor to possible hostile questions, Noel tossed out 25 minutes of what one attendee called "beach balls." Noel: Will you make the number this quarter? Ejabat: "We are comfortable with the estimates." Noel: Shouldn't those numbers be a little higher? Ejabat didn't take the bait. The numbers are just fine. Ascend shares were up 9/16 to 42 9/16 Wednesday. The exchange is a far cry from last summer and fall, when investors slowly tuned into the disastrous glitches in Ascend's remote access boxes for ISPs. Ascend execs had boasted about their prospects, and money managers were hostile toward the CEO of a fallen momentum stock. Today a string of contract wins -- GTE (GTE:NYSE) and others -- show that Ascend is gaining steam with new ATM switches for phone carriers. So the H&Q crowd was ready to be pleased. One manager was told to buy the stock for a "day trade," because the Ascend speech would be a blowout. It wasn't, but Ejabat's appearance added to the goodwill. Fore and to the Front Fore Systems (FORE:Nasdaq) CEO Tom Gill got a larger audience than he had at the NationsBanc Montgomery Securities conference in late January. Back then, he was only a few days into the job, but now he's got four months and a positive earnings surprise under his belt. Corporations are, in fact, buying Fore's ATM switches. Cisco (CSCO:Nasdaq) is a little behind here. Fore has kept its margins undented by price competition. And it has found some business with new phone carriers and cable companies. Wall Street likes the story right now. Fore stock has lifted to the low 20s from below 15 last month, and this time fundamentals are driving it rather than takeover rumors. It traded higher Wednesday, up 7/16 to 21 5/8. But long-haul skeptics remain. "You've got some run here," says vice president Ian Ainsworth at Altamira Management. But one obstacle has kept him from investing in Fore -- competition from Cisco. In coming months, the leading networker might just steamroll where it pleases. The Not-So-Hot-Line One interesting attraction here is a wall of trading desk phones in the middle of all the action. One problem: They're not for trading. "Most money managers use their own cell phones, so we are using these phones to communicate internally," an H&Q spokeswoman said. She noted that analysts and salespeople from the tech boutique are coming by to let the company's traders on both coasts know what's developing here.