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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..] -- Ignore unavailable to you. Want to Upgrade?

To: SteveG who wrote (289)	6/2/1999 3:47:00 AM
From: SteveG	Read Replies (2) \| Respond to of 1860

a relevant snippet from the ML's WCOM-SKYT report: What's Next for WorldCom? In our opinion, this is just the beginning of WorldCom's move into wireless. It is the only significant hole in WorldCom's portfolio of services, and is becoming increasingly more important to both business and residential customers. Most importantly, its biggest competitors, AT&T, Sprint and the RBOCs, already offer mobile wireless services. We continue to believe WorldCom's most likely partners or acquisition targets are Nextel (NXTL, D-1-1-9, 36 7/8), Sprint PCS (PCS, D-1-1-9, $45), or all of Sprint (FON, C-3- 2-7, $112 3/4) if WorldCom is willing to brave anti-trust scrutiny. What it needs is a nationwide mobile wireless footprint and Nextel and Sprint PCS are really the only options. WorldCom could attempt to put one together through GSM or MMDS, which we believe is a much less attractive alternative, as either would require years of construction and a nationwide footprint would be difficult to achieve. A partnership with Airtouch is another option, but would provide coverage of only half of the US. Lastly, we expect that WorldCom will look to fixed broadband wireless as a mean to extend the geographic footprint of its CLEC business – with Nextlink (NXLK, D-1- 1-9, $76 1/2), Teligent (TGNT, D-2-1-9, $49 1/8), and Winstar (WCII, not rated, $49 7/16) as the most likely partners or acquisition targets. We reiterate our intermediate-term accumulate, long-term buy rating on WCOM shares. The overhang on the shares due to concern of a dilutive wireless acquisition, in our opinion, is unwarranted as we believe such a transaction can be done with less than 10% dilution, is strategically in WorldCom's best interest and should result in enhanced long-term EPS growth. We are raising our 12-18 month price objective to $105. This is derived using the same methodology we used for our previous price objective of $98 -- a targeted P/E of 37x 2000 EPS, or 1.2x 5-year growth of 31%. We believe this is a conservative P/E target given that S&P500 currently trades at 28x for growth of 6-10%.