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Subject:  My 5 Finalists -- #3 Tellabs Date:  6/13/1998  1:42 AM
Author:  MrShihTzu Number:  212 of 8329

First, I've got to admit that this is the one that I know the least about. I picked it because it intrigued me and because I think telecom is an important part of the future.

Tellabs -- According to my calculations from the most recent 10Q, they pass all the numerical CK criteria, other than the flow ratios.

Gross Margin -- 63.3%
Net Margin -- 20.8%
Leveraged Flow -- 1.55
Unleveraged Flow -- 1.55
Cash/Debt -- 210.7

The one thing that does make this one difficult to evaluate and recommend is the recently announced merger with Ciena. Large mergers of high tech companies do not seem to have a great track record.

The stock's performance over the years certainly speaks for itself.

Personally, I like the direction as well. EPS has grown by more than 64% over the last 5 years and is expected to grow just over 30% over the next 5.

Biggest shortcomings of this one is that they have a somewhat "heavy" business, and they fall a little short on the flow ratio side of the equation. I like the fact that they don't seem to carry a lot of inventory either.


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