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Nortel AS (NTEL.TO)

DON'T BUY
Have had a number of changes in management in the last few weeks which is always disruptive. This company is still losing market share. Still have a lot of debt and there is litigation risks.
DON'T BUY
Not interested in this one. Yesterday’s story. Has a long history of trading at about 1.5 X book value and 4 X book.
PAST TOP PICK
(A Top Pick Sept 15/05. Down 8%.) Had a negative earnings surprise. Not in the top 25% of his database.
WEAK BUY
They do $10/12 billion a year in sales and they earn between half and one billion, so you are making about $0.10 US in earnings. Treat as a trading stock.
BUY
Had a very muted cycle into the beginning of '04. And had another cycle coming in and just turning up again now. Has been getting a series of higher highs and lower lows.
DON'T BUY
Looking strictly at fundamentals, you get $0.20 of earnings and give them a higher multiple and a reserve based on their groth, he can only come up with a value of $3.50/4. Fully valued. They need a few years of growth to get back to $8.
WEAK BUY
Has turned the corner in regards to stability in its business, but still suffering. Starting to see a little bit of sales growth. Expects cost cutting to take place resulting in higher margins over the next couple of years. The risk is their exposure to growth markets. Would be a trader within its range.
BUY ON WEAKNESS
Has a new CEO and thinks he will do very well. Would buy at $3.50.
WEAK BUY
Gave stronger 4th quarter guidance than what was anticipated. Likes their new CEO. Valuation has some modest upside to it. End markets are pretty good.
TOP PICK
Seems to be a play in the high speed down link packet access. Also have a new product on the enterprise side which is a PBX in a box which also offers Voip protocol. Earnings are expected to grow from $0.09 to $0.22 in '06 against a 17 PE.
DON'T BUY
The psychology towards the stock has changed with the management change. Starting to do the right things. From a valaution point of view it's probably not far off of being fully valued.
DON'T BUY
The new CEO is an excellent addition to the company. The company still has some challenges ahead of it, principally making sure its R & D expenditures are productive and it keeps its technology edge. Still expensive to its earnings.
BUY
Looking at it very carefully. Thinking of taking a half position and then see how the new CEO does. OK if you have a 3 year view.
WAIT
From what he knows now, he can see another $1 on the stock price, but he doesn't have enough information to be precise. New CEO, so you have to at least see him showing his teeth in the next 3/6 months.
DON'T BUY
Would look at this at around $1.80/2.00 which would be at about 1.5 X book. That is typically where the stock has bottomed.
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