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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (18657)	7/5/1998 3:59:00 PM
From: Glenn D. Rudolph	Respond to of 45548

Investment Highlights: n Revenues: * We expect FORE Systems (FORE, $25 7/8, C-2-2-9) to report the strongest revenue growth with an increase of 47%. * We estimate that ODS Networks (ODSI, $6 §, C-3-2-9) will have the most significant revenue decline. n Gross Margins: We expect gross margins for most data networking companies to be flat on a sequential basis, with Bay Networks (BAY, $31 9/16) having the largest increase (2%). n EPS: * For the June 1998 quarter, we estimate that on a weighted average basis, EPS growth rates will increase by 10% for the data networking companies reporting, excluding BNYN (BNYN, $7 7/8, C-3-2-9) and GDC (GDC, $4 15/16, D-3-3-9). * We expect FORE Systems will report the strongest year-over-year EPS improvement with an increase of 162%. n Price/Earnings Ratios: The weighted average of P/E ratios for our universe of data networking companies is currently 29-times calendar 1999 EPS estimates (excluding GDC and ODSI). This compares to the current S&P 500 multiple of 23-times Merrill Lynch's 1999 EPS estimates. n Recommendations: * Our focus stock for 1998, Cisco Systems (CSCO, $93 5/8, C-2-1-9) is currently growing faster than most of its competitors, and therefore continues to gain market share. Other Recommendations Include: * After four consecutive quarters of a year-to-year decline in quarterly EPS at Ascend (ASND, $49 9/16, C-2-2-9), we are forecasting EPS growth of 50% in the September 1998 quarter. * We believe that 3Com (COMS, $30 11/16, C-2-2-9) and Novell (NOVL, $12 ‘, C-2-2-9) both have opportunities to improve gross and operating margins during the next several quarters. * We expect FORE Systems' 40 gigabit switch to have gross margins higher than the corporate average and to contribute potential revenues Bulletin United States Telecommunications Equipment/Networking 1 July 1998 Joseph J. Bellace First Vice President Mark Lipacis Industry Analyst Data Networking Anticipated EPS for the June 1998 Quarter Reason for Report: Recent Business Trends Merrill Lynch & Co. Global Securities Research & Economics Group Global Fundamental Equity Research Department RC#10218219

To: Box-By-The-Riviera™ who wrote (18657)	7/5/1998 4:05:00 PM
From: Benkea	Read Replies (1) \| Respond to of 45548

$500 bil market by 2001! 3Com is mentioned as a competitor for Cisco and Lucent for ,"Furthermore, the immensity of the communications equipment market--estimated by Dataquest to be worth over $500 billion by 2001--will require multiple infrastructure providers. "There's no way that one, or even just two, companies will be able to serve such a huge market," admits Mr. McGinn." redherring.com

To: Box-By-The-Riviera™ who wrote (18657)	7/5/1998 11:51:00 PM
From: joe	Respond to of 45548

>>Perhaps they can't deliver higher earnings/margins regardless of their mgmt ability.......perhaps they have become too commoditized and will now go the way of most pc,semi conductor, and storage stocks until overtly strong growth in these sectors is re established....<< First of all, the last earnings report was a good sign. It showed expenses cut. "too commoditized"...I don't agree if we consider switch routers, gigabit ethernet, and RAS equipment for example are not considered commoditized (yet). COMS has lots of products that incorporate the special value of intellectual capital. To me that's the main way of distinguishing it from 'true commoditized' equipment. The majority of the commoditized equipment you just mentioned is because of the glut from E.Asia. Lots of E.Asian companies kept producing without regard to profit and now they have a distinct advantage with a high dollar. Even NICs by COMS are considered superior to other NICs because they have added value. If you look at COMS as 'just a modem' company, then maybe yes, it would have trouble with being too commoditized. But still, it can make pretty good profits if it turns out that x2 modems are the best, and have major market share. Also, COMS is not geared to be a 'high margin' company like CSCO, so it knows better how to deal in a 'lower margin' environment. COMS future products are meant to be for the SOHO sector, so it's not going to be charging astronomical prices as does CSCO, but at same time, it won't be giving them away. Besides, look at DELL...a company can still do well with commodity items. So... you can't judge a book by it's cover. >>notwithstanding blips to either side for short term trading.....the chart in my view is really a series of declining tops....i.e. lower highs..... beginning in DEC of 1997 where the equity price peaked... << from dec to may, I just see a trading range from approx. 32-36. I know, I lived through it every day. >>hardly likely with such good fruit out there like yahoo, amazon<< You may be right. Good possibility that the big $$ are going into this area. I have a hard time believing it will be consistent, until those areas produce concrete earnings...otherwise, it's just a great area to trade in. >>add summer doldrums.....which I believe may have started already.<< I am asking myself, when the summer doldrums begin. It's confusing because I hear of the 'summer rally'. And the only down day I've seen in the techs was last thursday. Before that, CSCO, MSFT, DELL were pretty damn hot. joe