Nortel Hopes for Telecom Deja Vu

Article Excerpt

NORTEL NETWORKS CORP. $30 (Toronto symbol NT; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Speculative) was extraordinarily successful in the late 1990s with its telecom, network and Internet expertise. It crashed early in this decade with the deflating of the Internet boom. Now it hopes to prosper again by focusing on WiMax, a new wireless communications platform that is faster and covers more area than the current Wi-Fi standard. Many cellular service providers plan to upgrade their networks to WiMax in the next few years. Nortel recently lost out on a contract to supply WiMax equipment to a major U.S. wireless company. This will probably cut Nortel’s 2007 earnings by $0.04 U.S. a share. Nortel should still earn $0.70 U.S. this year, and the stock trades at 36.9 times that forecast. But the outlook for WiMax remains bright, and should provide Nortel with plenty of profit opportunities. Nortel is a buy, but only for aggressive investors. investors…

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