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

To: zbyslaw owczarczyk who wrote (8702)	12/23/1998 12:41:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 18016

Two behind-the-scenes mentions some may not have seen: <<< DECEMBER 22nd Newbridge Networks Corporation (NNC-TSE, NN-NYSE) C$44.60 TDSI Analyst David Beck Discussion with management improves confidence in company's prospects - BUY We have increased our estimates, target price and recommendation (from hold to BUY) on Newbridge to reflect increased confidence in the company's Q3 F1999 and F2000 prospects. Our improved confidence comes as a result of discussion with company management and industry sources. We believe that Newbridge will experience strong growth in its core 36170 product this quarter due to strength from many regions but in particular Europe. We also recognize that the company is facing some attractive year over year comparisons for Q3 and Q4 F1999 which should help in establishing momentum for the company's stock. Our current target price of $51.00 is based on forward earnings of $1.58 and a P/E multiple of 32 times. BUY with 12 month target of C$51.00 Return 14.3% >>>> And on Monday, from Merrill Lynch's Morning Call: Newbridge Networks (NN; $27; C-2-2-9) Apr99E$0.90 00E$1.25-1.35 Market Cap 4,817.3mm * On Friday NN announced the sale of its third affiliate over the past three months, Vienna Systems, to Nokia for roughly $90 mil. We think these affiliate sales highlight the change in strategy NN's new management is taking; shedding its non-core assets, improving its balance sheet and increasing focus on its core market, wide area networking (WAN) technology. * Overall, we view this positively. * We think investors may be a bit concerned over the sale of Vienna, as it is a leader in voice over IP technology. * In our opinion, it reflects the strategy of NN's new president. * After meeting with Vienna, it is clear that the company's technology is not core to NN's ATM WAN business. * NN holds the number two market share position in the ATM WAN space, which is one of the fastest growing segments. We think NN needs to focus in this area as it has lost a bit of ground recently. By selling these affiliates we think the company can increase its focus. * NN's balance sheet has improved significantly. * We expect the trend of large equipment vendors purchasing small data communications companies to continue. * We believe NN will announce its role in the Global One contract within a month, possibly sooner. * We maintain our Accumulate rating on NN. (T. Astle) <<<<