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

To: Dennis R. Duke who wrote (4927)	6/4/1998 10:21:00 AM
From: Brett Nelson	Read Replies (2) \| Respond to of 18016

This might help explain some of the sell-off. This guy is like the Kurlack of networking stocks: From Reuters: Investors sold off Newbridge Networks Corp. (NNC.TO - news) stock on Wednesday even though the company's fourth-quarter profit met analysts' expectations and halted a three-quarter trend of disappointing earnings. ''The numbers last night were in-line with expectations -- bang on what we were expecting on revenues, earnings, costs etc,''said telecommunications equipment analyst Robert MacLellan of Kearns Capital. MacLellan said he still had strong reservations about Newbridge's future. ''We are maintaining our reduced rating on Newbridge. We are banging the table on that today,'' he said. Kearns cut its rating on May 19. The institutional brokerage has a 12-18 month target of C$32 on the stock. ''We think it's at least 30 percent overvalued. We also have some strategic issues that we feel have to be addressed and addressed very quickly,'' MacLellan said. MacLellan said the biggest flaw in Newbridge's strategy is its excessively narrow product portfolio which is largely focused on the asynchronous transfer mode (ATM) technology once hailed as the best way to transmit voice, video and data over networks. MacLellan said Newbridge's all-or-nothing strategy leaves little flexibility if it suffers reversals in its staple businesses. ''I would not be surprised to see some sort of realignment of Newbridge's corporate strategy in the next 12 months,'' he said. This could involve a corporate restructuring or even a writedown. Hello- 30% overvalued!! From yesterdays close, that suggests near term price target of $17US!