[December 17, 2003] Zacks.com Expert Watch Highlights the Following Stocks Find out what's hot and what's not in the telecom arena. Get the Experts' insight on what stocks to buy and what not to buy in Part III: Industry Focus. Read the full Experts Watch article with commentary and recommendations on Net2Phone (NASDAQ:NTOP), Liberty Media (NYSE:L), MIND C.T.I. Ltd. (NASDAQ:MNDO), AT&T Wireless (NYSE:AWE) and Nextel Communications (NASDAQ:NXTL); go to; http://at.zacks.com/?id=101 Here are the highlights from the Experts Watch column: Looking to add some zip to their portfolios this holiday season and in the New Year, the Experts turn to the telecommunications sector. This behemoth, which has experienced the fickle tide of street sentiment, continues to evolve. Find out what industry some Experts think will be the next benefactor of a new wave of investment spending and what former darling industry one Expert urges to shy away from for the moment. Voice over IP (VoIP) will be one of the most exciting evolutions and largest recipients of capital spending going forward. FindProfit editors, Bill Martin and Matt Ragas are currently conducting due diligence on Net2Phone (NASDAQ:NTOP), which is backed by Liberty Media (NYSE:L), a company whose shares are in FindProfit's portfolios. The company just closed a $50 million offering and has $110 million in cash on hand. Ian Wyatt, editor of the Growth Report, is also interested in the VoIP sector and recently initiated coverage on MIND C.T.I. Ltd. (NASDAQ:MNDO). MNDO manages calls, monitors and stores data on usage and provides billing and accounting services for the enterprise market. The company grew revenues 33% year over year in the 3rd quarter and 8% sequentially. MNDO also paid out a 3% dividend this year. The company trades at 26x earnings, but a more modest 14x enterprise value. The company's volume is fairly modest and has no coverage, but Wyatt thinks it could continue to achieve 25-30% annual growth, and may reach $7.50 in 2004. The wireless market in the United States is about 50% penetrated, compared with about 75% in Europe, so the companies in that space still have room to grow. However, Richard Moroney, editor of Dow Theory Forecasts does not believe that the wireless companies will be able to grow sales anywhere near the rate they became known for when cutting their teeth in the late '90's. The market is maturing, and a number of factors will continue to make business tough for these companies. AT&T Wireless (NYSE:AWE) is the third largest carrier by subscriber count, and earned $.06 per share in the September quarter. The company has been cutting costs aggressively and still plans to lay off some workers as it strives to reach 40% margins. AWE has $4 billion in cash, but Moroney believes it will be forced to offer deep discounts and will encounter troubles with portability that will negatively affect its image. Nextel Communications (NASDAQ:NXTL) has the lowest churn and highest profit margins of any of the pure play wireless carriers. The company's profit was up 129% on 27% revenue growth in the September quarter. Its revenue per subscriber per month of $71 was about 20% higher than its peers in the industry. The company generated more than $330 million in free cash in each of the last four quarters, but its debt to capital remains around 63%. Read the full report with insight from the experts at Zacks.com: http://at.zacks.com/?id=102 [ Back To TMCnet.com's Homepage ]