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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Starfish* who wrote (7525)	4/6/1999 11:42:00 PM
From: Smilodon	Read Replies (1) \| Respond to of 18998

HLIT did not come from a cesspool. << Does their product(s) something that other fiber companies can't get?>> It was a Kleiner Perkins funded company. I have been long this stock and closed out my position earlier in the year in the twenties. It is getting a bit expensive for my value approach, but is still a great company. They make the electronics for the fiber optic systems being installed by the cable operators. For a two way service (like @Home) they need to upgrade their system, which often means HLIT. GI and Scientific Atlanta are their competitors and TCI is their biggest customer. HLIT is considered to have the best technology, but their product line is much more narrow. Their best product is a sytem using Wave Division Multiplexing to significantly reduce the cost of implementing an advanced fiber optic system. They have about a one year advantage over their competition. Maybe HLIT is overvalued, and maybe existing competitors or new competitors (ie Lucent) will catch them. But, maybe they will stay ahead or will be bought by a larger player. If you must short this, I suggest you wait for them to falter, because they are just beginning to prosper again, after suffering through the cable spending slowdown. They are also doing a secondary offering, so the investment banking whores will be out in full force. I would recommend SRCM if you are looking for a short in this area. HLIT is a real company with real technology, even if it is a bit expensive. Regards, Archer