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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Richard Miller who wrote (27755)	4/8/1999 3:06:00 AM
From: Wolff	Respond to of 122087

CYOE "blast from the past" from thestreet.com (1 of 3) Coyote's Small Pack of Followers By Kevin Petrie Staff Reporter 12/9/98 10:07 AM ET On Wall Street, Coyote Network (CYOE:Nasdaq) is still too young in its second life to be widely followed. But Vik Grover, an equity analyst at Kaufman Brothers, is keeping an eye on the company. Other Stories on Coyote Coyote Insiders Register to Sell Shares Forget Waldo, Where's Crescent? Coyote's Mystery Sales "It's definitely one of the strongest buys I've got in my portfolio," says Grover. His firm makes a market in Coyote shares, but has no underwriting history with the company. Grover knows Coyote's top execs, but as of late November he had not met anyone from Crescent Communications. Grover did not return a call seeking comment on TSC's inability to locate Crescent. Grover also recommended e-Net (ETEL:Nasdaq), an ill-fated technology play that zoomed to 19 in August -- more than 200 times sales for the prior four quarters -- then crashed below 3 in less than a month. e-Net still hasn't reaped profits from its patents for combining telephone systems with the Internet. Today the stock treads water below 5. Grover has had his share of success. He made a contrarian bearish call on the phone carrier Premiere Technologies (PTEK:Nasdaq) in August 1997 while working as a technology analyst at Sterne Agee & Leach, a brokerage firm in Atlanta. Vindication came in June this year, when Premiere's sales cratered and took the stock with them. As for Coyote: Grover initiated coverage on Nov. 9, urging clients to purchase the stock. Coyote stock has jumped as high as 16 3/4 from 9 1/2 when Grover got started. At these levels Coyote trades at five times the revenue it reported in the last four quarters. During that time, Coyote lost $38 million on an operating basis. Last month Richard Haydon, managing partner of the New York-based hedge fund Strategic Restructuring Partners, tucked more shares into his firm's portfolio. "I'm an animal lover," jokes Haydon. He notes that Coyote has sharpened its technology and bolstered its growth prospects since he helped resuscitate the ailing Diana Corp. in July 1997. Haydon says he owns 1.3 million shares. Strategic Restructuring Partners manages more than $100 million in assets, according to Haydon. In 1996 investors pushed Diana stock through the roof, believing the claims of James Fiedler and other executives that Diana's telecommunications product was unequaled by competitors. Noted short-seller Manuel Asensio of namesake firm Asensio & Co. wasn't convinced. In October 1996, when Diana was trading around 36, he rated the company a "strong sell." That wasn't all, his report said: "We estimate Diana's value to be at less than $5 per share." Diana was delisted from the New York Stock Exchange when it was trading at around that price. Today Asensio says he hasn't studied Coyote's latest technology, but he urges caution given the track record of Fiedler & Co. Fiedler's strategy is to acquire and invest in numerous "resellers" of voice and data calling services, then help them build physical networks with Coyote's special equipment. But not everyone is convinced it will work. "The only synergy is that your service provider gets a break on [buying] equipment," says Conrad Leifur, phone-carrier analyst with Piper Jaffray. Leifur does not know Coyote in particular, but says that if a company's service division actually wins many customers, its competitors might grow wary of buying its equipment, Liefur says. Indeed, this potential conflict motivated the services behemoth AT&T (T:NYSE) to spin off its equipment arm, now called Lucent (LU:NYSE). In terms of technology, today Coyote is attacking a niche that includes potential competitors such as Cisco (CSCO:Nasdaq), the leading builder of Internet gear. And telecom supplier Lucent has worked in this field for six years. Grover says Coyote holds an advantage in making small switches, which handle 10,000 lines and are better suited to start-up carriers with fewer customers. Fair enough. But a Lucent spokeswoman says Lucent has for years shipped switches with capacity as low as 500 lines.