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Registered User
Joined: 12/24/2004
Posts: 3
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Anyone want to explain to me what is going on with Lucent (LU)?
This stock has a lot of activity but the price stays the same.
What is happening?
Is it from day-traders? Inside buyers?
Based on the info I had and my personal (apparently) erroneous conclusions, I thought this stock would be climbing a little bit at a time.
So far it has done neither but the activity continues pretty strong.
What is happening?
Thanks in advance.
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Registered User
Joined: 12/19/2004
Posts: 457
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LOL!
My friend has been noticing the same thing.
FYI, I'm long 500 shares of LU. I liked the chart, and my friend, who is more fundamentally oriented, is bullish as well. I find it wise to heed his opinion.
My analysis (based on Elliott Wave) suggested that this stock could rise sharply over the next year or so--I'm talking triple. I asked him if there was anything fundamentally that could support the move. Suffice it to say, the company has weathered the fallout in the telecom field well, and has put together 17 straight profitable quarters.
They recently bought back come convertibles they issued just a few years ago. So things do appear to be improving. Cash flow is positive.
But keep in mind there is still a significant amount of skepticism surrounding the stock, along with some balance sheet issues. If you want to make a profit in it, be prepared to wait. I expect it to chop sideways for awhile. It appears to be in an accumulation phase.
There isn't any technical point that would suggest sell all by itself. There are just so many points of potential support. At the very least, you will need to wait for the next fundamental announcement, then see how the stock reacts.
Risk is so limitted at this point for a LU bull, it makes no sense for me to recommend a sell based on technicals alone. Find out how the market reacts to the next corporate news event. Then make a decision. A time stop, combined with a small position, is the best bet.
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Registered User
Joined: 12/2/2004
Posts: 1,775
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Hi jcepeda
I share similar sentiments with you on LU, and rmr1976 has a good take on it imo. And like rmr1976 I also have established a small position, with patience to hold for year or more. Here's a recent short blurb on LU from Briefing:
Live In Play
09-May-05
07:13 LU Lucent - a rebound is in store - Barron's (2.58 )
Barron's highlights Lucent, saying that in the past 4 years the co has restructured its operations and slashed its debt. Now the co needs to increase earnings if its shares are to rise. The co's stronger balance sheet makes Lucent's junk-rated bonds an attractive option. The co's 6.45% debentures due in 2029, rated single-B2 by Moody's and single-B by S&P's, yield about 7.9%. Lucent's equity also might be an interesting speculation. Wall St. analysts remain negative on the stock. Even so, Steven Levy, a Lehman analyst, recommends the stock. He expects Lucent to see 5% rev growth, as its exposure to the growing wireless sector more than offsets declines in wireline business. Levy has a price target of $6.50 on the stock, which reflects a P/E multiple of 25x his '06 earnings est. Lucent's shares also could get a boost if the co is acquired, as has been long rumored. "When the time is right, and I think we have another year and a half at least, it would make sense for Lucent or Nortel to merge with one of the European equipment vendors, Ericsson, Alcatel or Siemens, because of the complementary customer base," says Levy. Either way, Lucent's shares have bottomed.
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Registered User
Joined: 12/24/2004
Posts: 3
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Thanks for the replies. What I was trying to find out is the reason for the high volume of trades but no price movement.
It appears that someone (or someones) is trying to gauge how much interest (or lack of) there is and is putting out a bunch of shares and when there is no significant interest is buying them back again.
This is what I am confused about.
I also have an interest in it but it is insignificant to affect the market in any way. :)
Thanks for the comments though. These kind of affirm my search parameters which makes me feel good even if the stock has done nothing yet for all my efforts
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