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 : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: radman33 who wrote (27746)	2/6/1999 5:01:00 PM
From: bgg	Read Replies (1) \| Respond to of 45548

recent drop was a combination of factors: Cisco announced earnings, and said they had great progress in the small-to-medium business segment, This is a market where 3Com used to dominate, but is now seeing heavy competition. Market took Cisco's statement as Cisco taking market share from 3Com. Cisco said in its call that it saw LAN switching prices under pressure. 3Com has the heaviest percentage of LAN switching and is most exposed. NIC prices are expected to fall again. This is 3Com's No. 1 business. 3Com lowered Palm prices by 20%. All of these factors impacted the stock. There's also concern about the current quarter, but that should have already been built into the stock, as management already disclosed this one month ago. COMS is a good stock. It suffers from being compared to CSCO. If you're a networker today, you are judged on how healthy your growth is and how well positioned you are for the future convergence market (data, voice and video over one network). CSCO and Lucent are seen as the dfront runner. CSCO just posted 40% revenue growth. 3Com is expected to show flat sequential growth, and year over year growth in the low 20s. Doesn't mean that COMS is a bad investment, but it does mean that COMS has more potential to disappoint based on the high indsutry bar set by CSCO. 3Com's product mix cannot match CSCO's growth. I see the stock continuing to rollar coaster, until the inevitable time when 3Com will bow to consolidation. At that point, stock will take a nice hike up. I don't think you'll see this stock at 100 anytime soon. 60s is feasible (within the next 12 months) on news of a buyout. So, with this latest dive, it would be a safe bet to add to your position. Better yet though, buy CSCO and/or Lucent. They may seem like expensive stocks, but those two companies are the best positioned to take advantage of a HUGE future market.