As you can see in Table 1, shares of telephone-system equipment maker Nortel Networks (NT, news, msgs) had the biggest bounce on the October trampoline, vaulting nearly 250% from its low at 44 cents to a high on Nov. 6 at $1.52. And shares of fellow equipment giant Lucent Technologies (LU, news, msgs) had the fourth-largest move, up almost 90% from a low of around 70 cents to a high around $1.32.
There were two good reasons for these advances.
The first is technical. As shown in the last column of the table, their shares were very low priced by the middle of October and also among the most heavily shorted names on the board. When such stocks start to move up sharply, short-sellers buy shares to “cover” their positions -- sending prices higher, faster, than would occur from mere buying interest alone.
The second reason is fundamental. Regional Bell operating companies, also known as “carriers,” have said in recent weeks that they plan to cut capital expenditures by up to 30% next year from already low levels. If they really cut spending by that amount, and their comments are not just political posturing in an effort to obtain some sort of bailout from the federal government, then what few dollars they spend are likely to go into the long-delayed maintenance of old, or “legacy,” equipment -- not brand-new devices. In this scenario, Lucent and Nortel are likely to be among the few recipients of carrier spending in 2003.
Both Lucent and Nortel shares have been the subject of heavy buying by top management and directors in recent months -- at prices up to 50% higher than the peak of the recent move. Price-to-sales and price-to-earnings ratios for both stocks are at historical lows. Lucent has a high debt load, while Nortel’s load is more modest but still substantial. The revenue and earnings trends at both companies are terrible, and sentiment about the stocks is worse. To buy either now for the long term, you need not draw a grand scenario that paints a robust future. You must only make the bet that they are not likely to go bankrupt.
http://moneycentral.msn.com/content/p33419.asp
Insider transactions:
http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=nt
有好转的迹象。我没有打算买。
