Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Winstar Comm. (WCII) -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (9497)	12/7/1998 10:21:00 AM
From: SteveG	Read Replies (1) \| Respond to of 12468

BTAB report from last week (DW, note CLEC comments): ================ - We believe WinStar may make a major announcement in advance of an analyst meeting in New York in two weeks, speculation about which, we believe, fueled strong gains in the stock. -- POSITIVE NEW NEWS: We believe WinStar could address at least two not-so-new topics: expansion of the domestic rollout, or details on an initial international rollout. While WinStar has alluded to both topics in the past, we are still awaiting detail on the Company's plans. Additionally, on Wednesday a former chairman of the FCC projected that the CLEC industry could capture as much as 5% market share per year from the incumbent carriers during a keynote address at a local phone industry conference. We believe these comments support our notion that CLECs could win up to 50% market share within 10 years. -- NEGATIVE NEW NEWS: None. -- STOCK PRICE PERFORMANCE: YTD, WCII is up 16% versus a 37% gain in our CLEC Index and a 19% gain in the S&P 500. -- NET-NET: While we can't say whether WinStar will make any announcements ahead of the analyst meeting or not, we believe any details on the domestic and/or international front would bolster WinStar's (already-bullish) growth prospects. -- VALUATION: Based on our 10-year DCF, using a 10x terminating multiple and a 25% equity discount rate, our 12-month price objective for WCII is $51/share. ========= Note - Bo and Jeff's DCF is more conservative than others in both discounting more (25%) and in modeling a build into 70 cities with a consequent LATER EBITDA breakeven. WHEN they announce this faster/broader build (which they haven't YET), BTAB won't have as much to adjust. And IF they announce additional revenue streams from a variety of sources, including the GSA contracts (sidenote: AFCI was approved this AM for GSA), then these projections would have to go up. Steve