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

To: P2V who wrote (2029)	9/18/1998 12:24:00 PM
From: Terry D	Respond to of 5390

Random thoughts - First Boston started ERICY as a strong buy on July 17 - Yep, that is the high. Sweet call. Wish I had sold to their customers. But I sold in the 28 area after the crappy earnings. And yesterday I bought a half position. Why? I'm guessing - 1. China will spend on its infrastructure to keep the economy from rolling over. 2. The breakup of Telebras will reignite some level of spending in Brazil. 3. The new platform for handsets will leapfrog Nokia's and sales won't be nearly as terrible in 1999. (that is a leap of faith based on past experience of product cycles) 4. AXE switch. 5. Weakening dollar 6. Comfort with the company, its management and their focus on shareholder returns, also based on past experince. 7. The massive dividend. t d PS - Here is a follow up article from SMARTMONEY ONLINE - ERICSSON IN OUR October cover story "The Seven Stocks to Buy Now," we recommended two telecom stocks that have been hit hard by the market's recent turmoil. Ericsson (ERICY) is off 13.7% and Bell Canada International (BCICF) has lost 7.9% since the beginning of this month. In our view, the drop in their prices only makes them more attractive to investors. On Thursday, Ericsson dropped 7.2%, the victim of a broad assault on the telecom sector that came after French equipment maker Alcatel (ALA) announced that its operating profits dropped 15% on a sales decline of 29% during the first half of the year. But behind Alcatel's horrific news lay some positive signs for Ericsson. Despite blaming the dropoff in part on the Asian economic crisis, Alcatel executives affirmed during a conference call Thursday that China -- Ericsson's single largest market -- was still strong. They also speculated that infrastructure sales to Latin America -- another region where Ericsson is a dominant player -- should pick up next month, as the newly privatized units of Telebras (TBR) resume their equipment spending. While Ericsson has already warned analysts about its weaker than expected third quarter profits, the company should hit its stride again in the fourth quarter, according to the Credit Suisse First Boston Wireless Group, supported by strong demand for its new AXE switch. Ericsson's forward P/E now stands below 16.2, making it even more attractive to investors.