Simon Leopold (Morgan Keegan & Company Inc. ) says Alcatel-Lucent is an attractive stock because the valuation is reasonable and because the company's financials are improving "with the operating margin turning positive in Q4 and near breakeven for the year."
On the valuation, Leopold adds that AlcaLu's 2009 enterprise value divided by its sales (EV/sales) is 0.2x, compared to Ericsson at 0.7x. (Having a lower EV/sales compared to peers means a company may be undervalued.) Leopold writes that "the gap is simply too big, and considering the company’s strategic importance to the world’s top carriers, we see it as a good long-term investment."
Another key finding from the survey: Quality matters. (See Quality Is Key to Online Video, Study Finds.)
Steven J. O'Brien (JP MorganChase) found Sonus Networks Inc. (Nasdaq: SONS)'s results a bit shocking: "We are surprised by the quick snap-back in demand allowing Sonus to quickly return to profitable levels."
— Phil Harvey, Editor-in-Chief, Light Reading