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

To: Doug who wrote (6255)	8/30/1998 11:04:00 AM
From: Ian@SI	Respond to of 18016

Doug, Thanks for the last 2 notes. I believe I better understand where you're coming from. (I have some Semiconductor Capital Equipment stocks which I bought high, as it turns out, and long for the day when those stocks will regain some favour from the Street. :-() I do believe the NN story is quite compelling. 1. The valuation discussion of the last several posts puts NN at the bottom of its traditional range, the bottom for its peers generally and from a TA perspective is quite promising. 2. NN has a clear technology leadership with the 36170 family of hardware and software capabilities that make it highly desirable for its prime market segment - the World's largest carriers. 3. I believe that the technology decision has been made. <begin humble speculation> During the past 3 years, it wasn't clear which of several potential technologies would become dominant. e.g. - Gb Ethernet, FR, ATM, ... I believe this caused the carriers to "underinvest" until the roadmap became clear. That has happened. <begin cliche> ... and NN is in the CatBird's seat. <end cliche> Rather than "Generally,excess capacity, pricing wars and a global market in turmoil do affect earnings. ...", I suspect that we're going to see a rapid spurt in Revenue/Earnings growth for NN as the common carriers put in the infrastructure to handle the exponential growth in data traffic. <end humble speculation> As an aside, as recently as the end of the 80s, the voice network was more than 85% of the total bandwidth provisioned. I believe we're rapidly approaching parity (or the crossover may have already happened. Before the end of the next decade, voice bandwidth will be just a nit carried on the new network infrastructure. I expect NN to be a key player in building that new multipurpose network. Yes, I'm on record. Yes, I'm long. And if you remember, feel free to either call me a pollyanna or congratulate me for my brilliant foresight 1 year from now. Regards, Ian.