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klar an einem tag wie heute ( +44,87% ) sind mal wieder alle seit jahr und tag in covad investiert. aber egal ich freu mich mit euch - habe covad schon ein paar tage länger. lasse die aktie liegen ... warum? ihr solltet euch das invester paket schicken lassen (mail an InvestorRelations@covad.com genügt) und folgenden hammer artikel lesen (www.hammeronline.com) - Friday, December 1, 2000 "Hold on to Covad (COVD:NASDAQ). It?s currently trading at US$2 and is as cheap as they come for an industry leader with triple-digit growth potential. I put out a buy on Covad below US$6. It was at US$3 by the time you received the newsletter. Obviously, I think this is a better price. The stock was cut in half due to the old class action lawsuit. I?ve seen this more than once. In fact it happened to Manugistics (MANU:NASDAQ), one of the companies I used in my example when explaining this Covad trade. These lawsuits are generally settled out of court and are paid in stock. So shareholders dilute themselves to pay for a settlement to themselves in shares. The only winners are the lawyers. If you don?t like it, stop electing the bastards to elected office. Take a one-year view and stick with Covad." November 14, 2000 "This company might just be the best buy of the year ? and the time to buy it is now! Make 482% over the next 18 months from this DSL Broadband company. You know the drill: the dot-com dead pool has been growing faster than the implant business in Nevada. The Globe.com, Dr. Koop.com, CyberianOutpost.com... I could go on but I?ll spare you the litany of bubble-to-bust bromides and trite platitudes regarding tulip manias and Austrian economics. It?s now November. October has cleared away the last of the bullish sentiment. According to the Consensus Index of Bullish opinion published in Barron?s, the bullish opinions have declined from 45% to 37% over the past three weeks. This is a contrarian indicator, which assumes that most analysts are wrong at turning points in the market. The same goes for the put/call ratio which has dropped below 0.60. Anything below a 1.0 is a buy; above a 1.70 is a sell. This chart simply measures investor sentiment. Again, it?s a contrary indicator. The fall to grace Its time to reevaluate the current investment climate. Over the past year we?ve had a series of bad tidings, ranging from interest rate hikes to a surge in the price of oil. The Hammer believes that the sell-off in the U.S. markets has overshot. And based on certain factors, now is the time to buy bottomed-out technology stocks. Specifically, in the worst of the lot ? the broadband Internet industry. But first let me tell you why the big picture will become more benign for investors. <9922_images/trans.gif> The price of oil will drop Oil is a cyclical industry that takes from one year to eighteen months to cope with changes in supply and demand. I believe the price of oil has topped and is heading back into the low $20s. Prices recently plunged about $1 a barrel in anticipation of a hike in OPEC?s output, their fourth this year. OPEC has an automatic supply increase mechanism. If oil trades above $28 a barrel for 20 straight business days then OPEC spits out an additional 500,000 barrels a day. Cheaper oil benefits transportation companies. The transports have been on an upswing; utilities have also been rising. Both of these are leading indicators. <9922_images/util.gif> Drop in rates Furthermore, there is every indication that the mythical soft landing is going to happen. The wealth effect bubble of personal spending is moderating. Personal consumption rose by just 2 percent in Q3 and core inflation rose by only 1.9 percent. This isn?t the rabid double digit inflation coupled with high energy costs and skyrocketing gold prices that so many 45 year olds keep warning me about. Gold is priced at $265 an ounce. Not even close to $800. I believe these conditions leave room for a 50 basis point cut in interest rates by the Fed over the next year. Anyone who has been in the market over the past three years knows that when the Fed cuts rates ? Wall Street turns exuberant. Further catalysts for earnings growth and a bullish 2001 include the massive spending by congress with its record surplus. Pork might be bad for long term economic gains in this country, but it?s fantastic for short-term increases in earnings. <9922_images/manu.gif> There is only one conclusion you can reach after digesting these disparate circumstances ? The time to buy is now! Buy the dips for long term gains Last year, I recommended Manugistics (MANU:NASDAQ) after it got crushed on a slow down in revenues based on Y2K fears. I played the bounce from $13 to $21. It then went to $6 on its way to $107. Volatility can work for you. Or check out Ciena (CIEN:NASDAQ). Here is a stock that went from $50 to $4 after being dropped by Cisco. It has since climbed back to a high of $154! Outstanding! <9922_images/cien.gif> Now I?m not saying that every big tech you bottom fish for is going to be a huge winner. I am saying that if you take a two-year time horizon and buy solid companies shortly after the blood bath you will be rewarded. Slow dial-up connection ahead One of the many industries that has been taken to the woodshed is broadband Internet. The market has a tendency to sell-off great companies just before they get their act together. Day traders and IPO hypsters, uh I mean underwriters... Make big promises with short time horizons in new technology. When these expectations aren?t fulfilled they sell ? fast and furious. And given that there are no fundamentalist value fund guys following these types of plays, they tend to lose up to 90 percent of their value. This is where The Hammer works for you. With a broader understanding of business models, a shakeout of the wannabes, consolidation in the industry and this year?s macro-economic picture... I believe that certain market leaders ?which are expected to grow more than 300 percent next year and are trading at less than book value! ? could legitimately increase by more than 500 percent over the next year and a half! The company I?m about to elucidate on below has the lead in market share and is trading under $6. Preposterous. Problem solvers If you?d let me switch gears here I?d like to say that the Internet still sucks. I am disgruntled that the Internet remains impossibly slow. So slow, in fact, that three-quarters of all online shoppers abandon their carts before checking out. More than once, Datek has told me to try again later. That?s reprehensible. And I have a T-1 line. And forget about dialups at home. Every time your mother-in-law calls, you get kicked out of your favorite MP3 site. These problems were supposed to be solved by now. We were promised speed, movement, go ? go. I want bits and bytes zooming around like Jeff Gordon at Taladaga. But no, don?t even try to go to your favorite portal on a Friday afternoon when the whole working population of North America is visiting NOOF sites or checking out the latest exploding whale. Fiber to the home, satellites, DSL ? these were the problem solvers. What happened? Digital Subscriber Line DSL is broadband to the home that allows for fast Internet service over existing copper wiring. It is a technology that has been around for 11 years but hasn?t been implemented to any great extent, due to the fact that regional Bell operating companies (RBOC?s) have been lethargic and dull in their implementation. RBOC?s must flip a switch at their central office (hook up a node at their DSLAM). They are descended from a monopoly and believe that they shouldn?t cooperate with any new idea that might increase competition. There have been a series of court battles to speed up the process. Covad has won these fights, including a recent $750,000 lawsuit against Bell South. Furthermore, new legislation and an enforcement arm of the FCC seems to have had the effect of speeding up the cooperation of these RBOC?s. The Hammer believes that the customer service problems and time drags for installing DSL will be solved going forward. <9922_images/covd.gif> The Covad story ? a beaten down leader Once upon a time, Covad was the darling of Wall Street. In fact a mere 9 months ago, in March, its share price was at $66. Covad came out of the gate in February of 1999 riding the wave of Internet mania. Retail investors and analysts alike saw the four-digit growth rate and sent the company into the stratosphere. We all remember March of this year, when bubble finally burst. The liquidity dried up and the dot-coms were sent to money hell. The good were taken down with the bad. And then last week the bottom fell out. Covad announced that it has had problems collecting money from smaller ISP?s and telecoms. This is due to the massive shakeout of the telecom industry. Covad missed its revenue growth numbers by a mere $14 million (money that it is still due and might be collected in Q4). The market rewarded this announcement by sending its shares into the toilet. REVENUE Note: Units in Thousands of U.S. Dollars 1997 1998 1999 2000 MAR 0 186 5,596 41,807 JUN 0 809 10,833 58,160 SEP 0 1,565 19,141 66,653* DEC 26 2,766 30,918 ? Totals 26 5,326 66,488 166,620* EARNINGS PER SHARE 1997 1998 1999 2000 MAR -0.004 -0.260 -0.373 -0.730 JUN -0.036 -0.740 -0.407 -0.860 SEP -0.107 -1.227 -0.470 -1.220* DEC -0.164 -1.313 -0.530 ? Totals -0.311 -3.540 -1.780 -2.810 Massive growth, low down payment But let me remind you. The Internet is real. Hundreds of millions of people use it every day. Money will be made. And the time to buy is when nobody wants anything to do with it. Over the last year, Covad grew revenue by 1148%. Granted, it?s growth off of a low base, but in 2001 that number is expected to be 300%. That means Covad is expected to have almost one billion in revenue next year. Its current market capitalization is only $800 million! It is trading less than book and at less than one times forward revenue. That?s as cheap as they come for an industry leader with triple digit growth! And it gets better! The market acceptance of DSL is only at 3 percent. Covad owns 17 percent of this three percent. There is plenty of room for fiber to the home (our MDTV play) and DSL, as well as cable. Technologically, cable isn?t up to snuff for two-way internet broadband capability. So, start from that basic idea that everyone wants broadband, and DSL should end up with some portion of market share. RBOC deals and desires The biggest concern most people have regarding bombed out companies is that they won?t be around in a couple of years. Covad recently signed a monumental distribution deal with SBC Communications. SBC is the only telecom stock that has actually gone up over the past year. SBC will resell Covad DSL connections nationally. This deal guarantees Covad $600 million in revenue from those sales over the next six years. Furthermore, SBC will buy 6% of Covad for $150 million. That price equals SBC?s buy at $15 on the share price. That?s more than a 150% premium over Covad?s current market value. Given the 300 percent growth rate going forward, the new enforcement of competitive legislation, the SBC partnership and the ever important possibilities of a buyout by a larger telecom, such as AT&T... Covad seems like a screaming buy under $6 a share." |
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| aus der Diskussion: | Schnelle 100 % mit Covad Comm !!!!!!!!!!!!!!!!!!!!!!!!!! Heute beobachten!!!!!!!!!!!! |
| Autor (Datum des Eintrages): | Jockey (29.01.01 19:51:15) |
| Beitrag: | 54 von 69 (ID:2797088) |
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