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

To: Ian@SI who wrote (6587)	9/16/1998 11:01:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 18016

I'm beginning to wonder if analysts and the media don't know how to classify NN. It's not a telecommunications integrator so they leave it off that list, and while it's a networker, it's known for supplying carriers, so gets left off the networking list. I hope Lutz & Matthews clear up the misperceptions next week. For those who don't have a subscription to WSJ, here's the article in part: <<< September 16, 1998 ÿ Wall Street Smiles on Telecom Equipment Stocks Again By Rivka Tadjer Many stocks were pummeled in the July-August Wall Street massacre, and telecommunications equipment manufacturers were no exception. High-flying Lucent Technologies lost 35% of its value, from a 52-week intraday high of 108 1/2 to a recent low of 70 7/8; Northern Telecom dropped 37%; American Depositary Receipts of Finland's Nokia gave back 29%, and ADRs of Alcatel slid 36% from their peak. Why? Well, round up the usual suspects, but investors were especially concerned that these capital-intensive companies are particularly vulnerable to economic slowdowns in the developed world and to the implosion of Asia, once a showcase growth market for building telecom infrastructure. But even though the global economic problems are real, some analysts argue that over time the telecom equipment market will thrive as service providers around the globe build new networks and upgrade their old ones for the digital age -- and that current share prices don't reflect these companies' potential. "Telecom equipment is the next&hellipgrowth industry," says Greg Geiling, telecom equipment analyst for J.P. Morgan. "Deregulation and privatization, and growth of the Internet all add up to this market segment growing [in the] mid-teen range over the next two years." Steve Levy, telecom analyst at Lehman Brothers, adds that we'll see lots of merger and acquisition activity over the next couple of years, as market leaders scramble to meet all their customers' needs -- even if it means buying someone else to help them do it. That's why telecom equipment supplier Northern Telecom bought networking company Bay Networks. As of October 1, Lucent will be free to pay for big acquisitions with stock, and Levy and others expect it, too, to buy a big networker like Ascend Communications. Long distance carriers, local phone companies and other existing service providers are under intense competitive pressure to upgrade their existing copper and fiber networks to allow more data to flow through it, while upstarts like Qwest and, to some degree, Worldcom are building state-of-the-art networks from scratch. "This adds up to buying a lot of telecommunications equipment," says Levy. The emergence of Internet telephony will surely spur more equipment sales as well (see Dvorak on Technology, "Internet Telephony Is the Next Wave"). [Paragraph saying LU will be leader and why. . .] Tim Luke, wireless technology analyst for Lehman, says Lucent also is well-positioned to exploit the market turmoil in Asia, and in particular to attack Ericsson's hammerlock on the Asian wireless market. "Lucent is a global company that&hellipcan offer vendor financing to potential Asian customers right now, where Ericsson and Nokia may not be in as good a position to do that right now," he says. Lucent has about $4 billion of the $30-billion global wireless market. [JP Morgan likes NT. . .] Some European suppliers, which are not as well-positioned as Lucent or NT, are trading at attractive multiples, too. Alcatel's ADRs closed Tuesday at 35 3/8, around 18 times 1999 consensus earnings of $1.93 a share -- well below its 27.8 percent projected earnings growth. And Ericsson, which is faring worse than its peers because its wireless business in China has been hurt by the Asian market turmoil, is selling at 21 times 1999 estimated earnings of $1.07 per ADS, right on par with its projected 21.6% earnings growth rate, according to Zacks. >>>>