Still Buy FleetBoston
FleetBoston Financial (FBF ) Maintains 5 STARS (buy)
Analyst: Stephen Biggar
The financial services company agreed to acquire the asset management business (not the whole company) of Liberty Financial Companies, including about $51 billion in assets under management, for about $1 billion, adding sizably to FleetBoston's existing asset base. Liberty's well-known asset management names include Colonial Management and Stein, Roe & Farnham. The deal is part of FleetBoston's strategy to expand its high margin, annuity-like businesses, and create added capabilities to leverage its existing base of discount brokerage and private client customers.
Comverse Technology (CMVT ): Maintains 4 STARS (accumulate)
Analyst: Ari Bensinger
The company posted Q1 EPS of $0.43 vs. $0.32, a penny above estimates. Sales were up 36% on strong demand for enhanced communication service software, mostly by wireless providers. While mobile unit growth is slowing, wireless traffic usage is strong. The company is broadening its customer base, and has over 370 communication provider customers. New products were 20% of sales, and S&P sees growth for IP-based unified messaging solutions and voice controlled services. The company sees fiscal 2001 EPS of $1.79, and sees fiscal 2002 of $2.12. S&P expects enhanced communication solutions to become a bigger part of telecom spending. Comverse is the clear leader in this attractive market.
Xilinx (XLNX ): Maintains 5 STARS (buy)
Altera (ALTR ): Maintains 3 STARS (hold)
Analyst: Thomas Smith
Xilinx's monthly update for May is open to modestly bullish interpretation. Guidance for June quarter revenue was unchanged at 15%-25% lower sequentially. Rival programmable logic chip maker Altera last week guided to a 25% sequential revenue dip, from 20%. So industry-wide demand and inventory woes plainly are evident but Xilinx is likely a step ahead. While Altera complained of weak international sales, Xilinx emphasized improved turns business, fewer order cancellations and pushouts, and new product sales ahead of plan. S&P prefers Xilinx in the next industry upturn.