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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Shroder Wertheim (Hijacked) who wrote (5570)	1/16/1999 4:51:00 PM
From: Serge Collins	Read Replies (1) \| Respond to of 8358

Thanks for posting that article. The jump in Layer 3 switch sales from 1998 Q2 (9.1% market share) to 1998 Q3 (33.6% market share) is an impressive gain. It augurs well for the future. I've looked at valuations in this sector and its clear that CS is very cheap compared to its peers. If you feel that the recent problems at CS can be corrected over the next few quarters, then a compelling case can be made that CS should be bought as an undervalued play in the networking sector. I compared CS with four other networking companies and Cabletron is clearly undervalued by every standard used to measure value. With the exception of P/E ratio, all other companies are at least twice as expensive when measured on a P/B or P/S ratio. CS is also the only company of the five that has a market cap under $2 billion. COMPANY...MARKET.....P/S.............P/B CSCO...........$160 B.........9.30x...........20x COMS...........$16 B..........3.00x...........5.40x NN................$6.8 B.........6.10x...........6.9x FORE............$2.2 B.........3.86x...........4.11x CS.................$1.67 B.......1.20x...........1.60x If CS is successful in turning things around this year, and I believe they have a good chance of doing that, then the market value of the company will play catch up to its peers and that could mean big profits for shareholders.