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Technology Stocks : International FiberCom, Inc. (NASDAQ- IFCI) -- Ignore unavailable to you. Want to Upgrade?

To: George the Greek who wrote (1028)	10/13/1998 6:59:00 PM
From: Starfish*	Read Replies (1) \| Respond to of 3541

An upbeat article for small caps, for a down day: Time for the great American small-cap stock heist I'll say it as plainly as I can. Buying a portfolio of small stocks today, (middle to late September) would be like taking candy from a baby. <Picture>The average age of the mutual fund portfolio manager today in America is 28. In fact, the analogy may be apt. The average age of the mutual fund portfolio manager today in America is 28. This age implies three to six years of involvement in the stock market. In most professional fields, an individual progresses from apprentice to journeyman to master, each phase taking as much as five years. One would hardly think that individuals with three to six years in a professional field are even journeymen. Perhaps this is the best explanation for why the Russell 2000 is down 20 percent year to date, while the S&P 500 is up 7 percent. It can't be the fundamentals, since the growth rates, the P/Es and the financials of the small stocks as a group exceed the outlook for large-cap stocks today. I can only imagine that companies selling at their cash value (cash + marketable securities, minus debt) are selling there because somebody doesn't know what they are selling. (Has anyone noticed the dramatic increase in insider buying?) Small capitalization stocks are now selling at one of their historic low valuations. (See exhibit one.) As measured by the Russell 2000, the best index measure of small-capitalization stocks, the average small stock declined 32 percent from the April 1998 high. The average S&P 500 stock, however, has declined only 19 percent from its July high. Small stocks are down 20 percent for the year, while the S&P 500 has recovered a bit and is up 7 percent. This under-performance has occurred in spite of the fact that the earnings outlook for small stocks in 1999 is better than the S&P 500. However, there are many technical reasons for the debacle in small stocks. Let's list a few. 1) A record number of initial public offerings in the last two years has put a strain on Wall Street's ability to cover all the new companies. 2) The record number of new companies is also putting pressure on market makers who are less familiar with the stocks they market. 3) The emergence of the SOES bandit, or the new Nasdaq market makers. With anyone able to place an order to buy or sell on the Nasdaq (and have that order shown to the public), market makers are operating only in those stocks they feel they have information about. This leaves a lot of stocks subject to Internet rumor mills and chat/newsroom opinion influence. 4) The Asian debacle has frightened a number of individual investors into cash. <Picture>Small capitalization stocks now are selling at one of their historic low valuations. 5) Margin selling hits stocks with low prices more frequently and more harshly due to the sliding margin requirements placed on low-priced stocks. 6) The normal providers of liquidity to the small-cap market (mutual funds with small cap charters) are fleeing the area as their relative performance declines. Smith Barney conducted a poll of mutual funds that historically have owned greater than 50 percent of their fund in small stocks. Today, only 21 percent of those funds currently hold greater than 50 percent of the fund in small stocks. Our forecast Small stocks and the Russell 2000 Index will outperform the S&P 500 from here on out, until sometime in the year 2000. Bold statement? Not really. It is much easier for a stock selling at $5/sh today, down from say $20 or $15 (not so atypical of many stocks I can think of), to bounce back to $10-12/sh in the next year, than it is for General Electric's stock to go from its current $78/sh to $156/sh in the same time frame. All it will take is some psychological relief from Asia. As I write this, Japan's opposition party announced a successful negotiation with the ruling Liberal Democratic Party to create an independent committee to oversee banking reform and restructuring, only to see the agreement overturned two days later. The important part of this agreement would be to take the banking reform process out of the Ministry of Finance, where the crusty, incumbent, "old boy" network continues to procrastinate. <Picture>We, too, think that buying small stocks today is a no-brainer.If such an agreement is reached in the next few weeks, this will be perceived as a good thing for Japan and a positive first step. I'm reminded of Pogo's famous admission: "I have met the enemy. It is us." Peter Lynch, the famous former portfolio manager of the Fidelity Magellan Fund gave two pieces of advice recently: "The world will sort itself out" and "Buy a portfolio of small stocks, they are the cheapest today." We, too, think that buying small stocks today is a no-brainer. Current prices are: "ludicrous," "suicidal," "idiotic," and "frightening." Don't follow the crowd. Get to know one of the "ugly ducklings" and ask it to dance. You won't have to wait long for it to turn into a beautiful swan. Christopher R. Helton appears as the Strategist at Stocksite. Christopher <crhelton@go2net.com> appreciates receiving email from both early adopters and laggards alike. Recent Strategists The Geniuses of Greenwich Time for the great American small-cap stock heist Fear, doubt and despair as investors eye future Investor worries drive market mood swings A global bull market for bonds

To: George the Greek who wrote (1028)	10/13/1998 8:21:00 PM
From: Feraldo	Respond to of 3541

If you look at the last quarters report, it mentions that the IFCI's increase in sales is mainly attributable to acquisitions, as well as earnings. There is also a shortage of engineers in the industry, so any integration is a good idea. Also, IFCI has left each of the divisions to operate on its own, basically, with the original management still in tact for a number of years. So I would say the integration depends not only on IFCI's management, but the management of the companies they take over. just some extra thoughts feraldo

To: George the Greek who wrote (1028)	10/13/1998 10:42:00 PM
From: david james	Read Replies (1) \| Respond to of 3541

There were a lot of questions at the Kaufman's Brother's conference about how they were integrating the acquisitions. I must admit that the CEO and CFO were quite convincing and confident regarding how these new acquisitions will fit in to the whole. As mentioned in the previous post, most of these have intact management and require little intervention. But it sounds like in all cases IFCI brings in their CPAs to insure that they have a good grip in their finances. They did admit that they had made some errors a couple years ago but had learned from them. I asked the CEO about the mistakes that Able Telecom made recently in their acquisition, and they were quite familiar with them and what they did wrong (e.g., floorless convertible debentures). The CEO said IFCI would NOT take such risks. One thing that was clear was that they were very happy with their recent acquisitions, and were confident that we would be happy with them too. With all the business and the lack of significant competition because of the requirements of a skilled workforce and significant capital, IFCI can command quite high margins - especially for the "previously owned" Telecom equipment market where pretax margins are over 50%. David