Peter HofstraNortel ASNTEL.TODON'T BUYFeb 21, 2005
History of free cash flow and return on equity is what tells you if a stock is good to own. If you had bought Cisco (CSCO-Q) instead of Nortel you would have had much better stock performance.
If you own the stock, you are playing that there is some value in the assets they own. The company is not a going concern. Have a huge deficit hole in their pension plan. Individual parts of the company may be better being sold off.
Has about $4 per share in cash. They are thinking of selling an asset that would raise about another $1 billion, which would add another $2 per share in cash. However, the overall quality of the balance sheet is as bad as he has ever seen it. Speculative.