“We believe that such expectations are not based on fundamental analysis, but rather on the hope that Fed rate cuts will soon have a positive impact on the economy, and that enterprises will start spending again on (information technology) communications towards the end of calendar 2002.”
“We continue to believe that there will be no end-of-year 'catch-up' scenario in spending, given enterprise focus on cost savings. The latest earnings conference calls by the contract manufacturers and server makers confirm this view.”
“We're not telling people to rush out and buy. We still see a gradual erosion of the multiple, a certain amount of disillusionment with management, a lag in earnings relative to the economic recovery and corporate spending. If people think we're turning positive on the stock, we're not.”
“In our opinion, companies that cannot sustain high revenue growth eventually see their premium erode over the sector. Although Cisco has succeeded in moving attention away from its lack of top-line growth to improved margins, we believe that investors are hardly attracted to a cost-cutting story.”
“Lucent has experienced some delay in executing its restructuring plan but [we] believe that the company is finally starting to feel a sense of urgency about its return to profitability.”
