ADC Telecomunications

**JimBob2232** Thu Aug 10, 2006 5:39 pm

ADC Telecomunications
What do you guys think about this stock (ADC)?

Was trading in the 20-25 dollar range prior to may 2006 when they announced they would aquire Andrew Corp. The stock tanked to below $12.00. Today they announced they are withdrawing their bid, and the stock jumped nearly 10% (closed at 13.89). Anyone here think this is a good play? The fundamentals have not changed signifigantly. The market valued essentially the same company at almost twice its current value less than 3 months ago.

**blast_investor** Thu Aug 10, 2006 7:54 pm

Hi JimBob2232,

This stock ADC is cheaper than its peers. The yield is also higher than its peers such as KIM or RPT.

However, in my opinion, ADC price is fairly valued.

KIM is too expensive. MALL and retail real estate are too hot, their real estate property value is over-priced in my opinion.

**JimBob2232** Thu Aug 10, 2006 8:15 pm

Sorry, Ticker is ADCT...(I was wondering what the heck you were talking about!)

I simply see this stock potentially being undervalued by the market due to negative market reaction over a failed takeover effort. I see no reason why this stock should be this low.

**blast_investor** Thu Aug 10, 2006 8:37 pm

Sorry, hit the wrong one.

ADC communication (ADCT).

It has quite bit of insider buying around $16 recently. So obviously, it is cheaper than the prior acquisition price.

The problem I see is that ADCT is extremely cyclical stock in telecom sector. Its valuation based on past year earning and this year earning is high. Unless you are confident on the huge earning growth, this stock is not a cheap value stock.

I would avoid it. Insiders are quite optimistic on their business, and many times could be wrong. Telecom business is too risky and too cyclical business for me, the valuation is too high.