Robert McWhirterNortel ASNTEL.TOTOP PICKSep 15, 2005
Model shows the P/E drops down from '05 to '06 to 17 X with earnings estimates of $0.22 gives an appoximate 22% ROE, a 17 P/E and it looks like things are turning around.
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.