Inside Wall Street
STAMP OF APPROVAL?
When the price of postage goes up, so does the stock of Pitney Bowes (PBI),
the leading maker of postage meters and related equipment: A price hike
involves readjusting all meters, and Pitney gets added revenues as a result.
The recent rise in first-class rates, from 29c to 32c, rescued Pitney from a
Pitney's stock, which slid to 30 in early February from a high of nearly 46
in March, 1994, has since edged up to 35. Growth investors have become wary
of Pitney, ever since earnings from Europe failed to meet analysts'
expectations. But value investors are buying. "We think the stock has
bottomed out here, so we've been buyers. We believe it's worth 44 to 48,"
says Nancy Tengler, managing director of UBS Asset Management in San
She thinks that, starting next year, sales of Pitney gear in Germany and
France will rebound, and she expects that China's 55,000 post offices will be
a gigantic market. She notes that Pitney has won an agreement from the
government to market meters there. "So far, we're only looking at China's
postal offices--never mind the thousands of commercial offices that will also
need Pitney's equipment and expertise to improve their antiquated mailing
services," she says.
But the early payoff overseas will come from Germany and France, where
Pitney has launched a new marketing strategy, says Tengler.BY GENE G. MARCIAL