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

To: Robert Scott who wrote (2458)	5/16/1998 12:37:00 PM
From: Bob A Louie	Respond to of 11568

Here's Solomom Smith Barney analyst Jack Grubman's comments from Barron's: Grubman: WorldCom is my favorite stock anywhere. If I had to pick one telecom to own, all things considered, liquidity, importance in indexes, strategic position, this would be the one. The correct model for this industry is to be an integrated, end-to-end provider of telecom services, especially for businesses and especially in providing data and Internet protocol services. WorldCom has the most diverse set of telecom assets in the world, period. No competitor is even close. They have 100 local networks in the U.S., 35 outside the U.S. and a pan-European network that runs from Oslo to Madrid and touches 32 cities. They also have an Internet backbone globally, with over 1,000 points of presence, lots of underseas fiber-optic cable, not to mention a 45,000-mile U.S. fiber network. Q: Whew! What don't they have? Grubman: They don't own MCI yet, but I'm sure the deal will go through. Pro forma for MCI, WorldCom, could generate revenues of $38-$39 billion in 1999. We think revenues then will continue to grow by 17%-20% a year. Q: And earnings? Grubman: Again pro forma, $1.90 a share in 1999, $2.90 in 2000, $4 in 2001 and $5.25 in 2002. Along the way, their revenue mix will continually change for the better, becoming more oriented toward data and Internet and toward markets that are huge and de-monopolizing, namely U.S. local telephony and non-U.S. markets overall. To me, WorldCom is the telecom representative in the large-cap growth sector. It's akin to Merck, Microsoft, Disney, Coca-Cola, companies that are huge and generate double-digit top- and bottom-line growth. Q: What's the stock worth? Grubman: A year from now, it could be trading at 30-35 times 1999 earnings and 25-30 times 2000's. This means that WorldCom's stock could trade between $65 and $70 a share within a year. It could be a $100 stock in two years. All this assumes a business-as-usual stock-market environment.