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

To: Satch77 who wrote (1666)	1/29/1999 8:45:00 AM
From: david james	Read Replies (3) \| Respond to of 3541

Hold on tight FiberCom poised to roll, says manager cbs.marketwatch.com By Thom Calandra, CBS MarketWatch Last Update: 8:26 AM ET Jan 29, 1999 Highs and lows PHOENIX, Ariz.. (CBS.MW) -- If cable TV continues to roll into the "nerve center of American households," as Tele-Communications Inc. President Leo J. Hindery calls the living room, then International FiberCom Inc. (IFCI) will see itself transformed into an entertainment and Internet gambit. So says Jack Morbeck, a principal at fund manager $7 billion Sirach Capital Management in Seattle. Morbeck, who describes himself as an old-style value investor, says International FiberCom of Arizona will benefit from the frantic laying of cable across America. Cable stocks are on a roll, in part because companies such as At Home (ATHM) and At Home part-owner Tele-Communications Inc. (TCOMA), the nation's largest cable company, hope to use broadband cable to deliver Internet content into the American living room. International FiberCom CEO Joseph P. Kealy of Arizona "has done a great job of creating a turn-key operation," says Morbek, who manages about $300 million and says he has a "nice-sized" stake in the company. "Let's say you're a cable company like TCI; FiberCom does the drawings, procures the cell sites, installs the fiber-optic lines," Morbek said. International FiberCom in its most recent Securities & Exchange Commission filing says its strategy "is to be a one-stop solution for the telecommunications marketplace." The company's customers, according to the filing, include Cox Communications (COX), AT&T Network Systems (T), Lucent Technologies (LU), Time Warner (TWX) and Motorola, (MOT). Alas, even after cable operators in the United States spent more than $10 billion upgrading their systems in 1998, International FiberCom's shares are languishing. The shares at 7 on Nasdaq give the company a market capitalization of $180 million. Morbek says the company's stock soon will reflect rapidly growing sales and profit. Thanks to the wiring of America, International FiberCom's quarterly revenue is notching new highs -- $25 million in the most recently reported quarter. International FiberCom, if it does the $150 million of business that Morbek expects in 1999, will sell for less than 1.3 times yearly revenue. That's far cheaper than another cable design and services company, DyCom Industries (DY), he says. The profitable International FiberCom likely will earn 40 cents a share for all of 1998 and 60 cents or more in 1999, the fund manager says. Gross profit margins are running 33 percent, up from about 28 percent some 18 months ago. Morbek says International FiberCom's shares might be under pressure from selling shareholders. A group of large shareholders has filed to sell about 6.1 million shares. See the amended filing of Jan. 20. Not helping, for now anyway: CEO Kealy in 1998 made several acquisitions of cable design and construction companies. Those purchases were for stock and added about 3 million shares to the company's outstanding common shares. The company's shares started trading on the Nasdaq Stock Market in October. Morbek, a self-described "old-timer" who marvels at the success of young money managers and the doubling and tripling of Internet stock prices, says International FiberCom could be seen as a beneficiary of the Internet rush into Americans' living rooms. Morbek says the company needs "better sponsorship" on Wall Street. Morbek used to work with Bill Fleckenstein, the Seattle fund manager known for his pessimistic view of soaring U.S. stock prices. Fleckenstein, says Morbek, "is a very, very bright guy who has learned that there are an awful lot of smart people in this business who respect the tape." Morbek is confident his own bargain-hunting style will prove itself over time. "Our philosophy is buying expanding earnings and buying stocks before the earnings start to prove themselves," he says.