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Alcatel-Lucent Message Board

  • wh000_123 wh000_123 Mar 20, 2013 12:28 PM Flag

    brian nichols..."a look back..."

    march 20, 2013

    "Alcatel-Lucent is a stock that will drive you crazy with its volatility, but one that continues to remain promising. Back in December, the stock had just popped after announcing a restructuring program, funded with $2 billion from Goldman Sachs. However, the stock has since traded volatile, and back down to near-even.

    Most don’t realize the pure size of Alcatel’s business, because of its $3.30 billion market cap. However, this is a company with almost $19 billion in revenue, and operates in a segment where most companies trade at 1.50-2.00 times sales. Therefore, if Alcatel had the 10% operating margins that other companies such as Juniper and Ericsson trade with, it would be a $30 billion company. As a result, I am very optimistic of the company’s opportunity to unload the junk from its business and to then focus on the gems of its business.

    This is a company with several segments of growth that produce great margins. Therefore, even if Alcatel loses half of its business, it would still be worth $15-$20 billion if margins become equal to the industry. The problem is that this will not occur overnight, and it will be a long and volatile road, but one that I believe will produce a $2.00 stock price by the end of this year."

3.27+0.11(+3.48%)Nov 20 4:04 PMEST

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