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Technology Stocks : STAR Telecommunications (STRX) -- Ignore unavailable to you. Want to Upgrade?

To: Madpinto who wrote (608)	4/20/1999 4:42:00 PM
From: Jeff Bond	Read Replies (2) \| Respond to of 780

I was just about to tell you of upgrade(s) released, or impending upgrades. But, fundamentally this is pretty much the same company as it has been the past month. The analyst community has been pretty active in upgrades/downgrades, which suggests STRX is either a difficult company to follow, or there is some lack of understanding. It wouldn't be fair to consider that upgrades and downgrades are released to stimulate price movement, would it? Nah! :o) Someone tell me why STRX will at some point not be bought out. They are building a network to international destinations not served well, they are connecting it to a national network to allow end-to-end service, and they just picked up a big juicy winner in PT-1. There is some debt involved in "building" such a company, but with resources to pay for it, STRX can become a cash cow for some large carrier. Lots of room for growth, lots of room for earnings suprise, lots of room for buyout possibility. Not much room for sales dropoff, not much room for negative news, unless its manufactured, or beaten old news. As an aside, the price took off at 9:30AM today, and was pretty drastic. The upgrades have more to do with the price action today than the press release. What is interesting is why the upgrades, so soon after recent downgrades? And, what is the basis for the upgrade(s)? Buyout is my guess, people realize the inevitable, that it's just a matter of time before it happens, and issue the upgrade to get their clients in before the possibility occurs. Either way, STRX is building out a system that will yield a nice cash flow, so share holders win whatever the outcome. It has recovered nicely from $8 1/2 hasn't it? One thing worth noting is that STRX has closed just under the 200 day moving average, something it has not done since last July. If the price closes above the 200 day ma, then how it behaves will become pretty important. If the 200 day ma acts as resistance, we're due for another ride back down. But, if it closes convincingly above, and remains above demonstrating it has become a support level, the price will continue to climb nicely for a while. Also, the 50 day moving average is starting to level out, and will soon begin climbing. When the 50 day ma climbs back up through the 200 day ma, we'll have begun another good long-term climb in price. That can happen in about 2 months or less, based on what goes on up until then. I think we're going to begin climbing the ladder, there is too much good going on to remain at these levels. STRX on the surface may not appear cheap with a PE above 35, but the earnings growth is an issue, one I feel more than justifies the premium. We'll see ... Regards, JB P.S. Here is upgrade/downgrade history link: biz.yahoo.com It might be worth noting Kaufman Brothers didn't do too well last May-July in their predictions (uh, and, ahem ... for that matter last summer when they shorted DELL). This is a smaller brokerage, we'll see what follows, that will say a lot more, but for the meantime I'm smiling.