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Nortel AS (NTEL.TO)

COMMENT
Has some nice products coming through which should give them some growth. Probably has a little upside from here. His company owns it as a trade. Not a long-term hold.
DON'T BUY
Has had a pretty good run recently, but he is still not a fan. Multiple is still pretty incredible. Not totally out of their legal problems. Too soon.
DON'T BUY
Model price of $15.54, a 48% negative differential.
TOP PICK
(A Top Pick Sept 15/06. Up 9%.) Had a double bottom with a higher low and has moved through its resistance point. Institutions will be buying it.
COMMENT
Just announced a new contract with Verizon (VZ-N). Would describe this as a slow turn. Trying to streamline the organization and have had some asset sales.
DON'T BUY
Management has a good plan, but they have to get some growth, CDMA products have to stay in the key of the market for a while, customers are consolidating and spending less, etc.
DON'T BUY
Starting to get more interested in this. Stock has gone sideways since June. Did some cost cutting and have sold some product lines. It’s an industry that is consolidating, so the prospect that they could be a acquisition target is out there. Still need to improve.
COMMENT
Turning around. Sold off some of their businesses and are winning some contracts. Treating as a trade, you might make some decent money on it. If you’ve held it for a while, consider selling as a tax loss and then buying it back in 30 days.
DON'T BUY
Not quite there yet. A lot of things are happening. Strong management team. Selling off a lot of assets, but going to be much more difficult than what they envisioned.
DON'T BUY
Did a 1 for 10 consolidation. The only companies that ever do that are those that are in trouble. Historically future is not good in these cases.
SELL
Generates free cash flow of minus $1 per share. Will have to go to the wall to borrow more money to keep the cash afloat. Operating margins are 1%. Has about 3 X debt to equity which is very risky.
DON'T BUY
Shares were consolidated on a 10 for 1 basis. Not a positive event for them. Expect there will be a decline.
TOP PICK
New management team in place. Implementing a cost cutting program to reduce costs by $1.5 billion. Accounting issues are behind him. Speculative. Looking out 2 to 3 years.
DON'T BUY
The Company is not doing well. A lot of debt. Not a high-quality balance sheet in his view. They keep disappointing.
DON'T BUY
A 10 to 1 reverse split is usually a very bad situation. Could be toast. Debt load is very high.
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