Dow Jones Business News
Westell Soars: Advanced Fibre Shares Also
Gain
Thursday March 20, 12:34 pm ET
By Adam L. Freeman
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Shares of telecommunications equipment sellers rose
Thursday on the benefits seen from Verizon Communications Inc.'s plan to expand
access to its high-speed Internet network by 30%.
Among the companies likely to benefit are broadband equipment makers, such as
Westell Technologies Inc. (NasdaqNM:WSTL - News) and Advanced Fibre
Communications , said Theodore Moreau, an analyst with Robert W. Baird & Co. Inc.
The analyst personally owns no shares of the companies he covers, but his firm has
received recent investment banking compensation from Westell.
Westell, the Aurora, Ill., maker of DSL modems, rose as much as 28%, breaking past its
Feb. 13 52-week high, while Advanced Fibre, the Petalima, Calif., maker of broadband
access equipment, jumped as much as 7%.
Westell, a "cheap stock", tends to trade with wider vacillations than Advanced Fibre,
Moreau said.
"Westell is a big turnaround story."
No Westell official could be immediately contacted for comment.
Shares of Westell recently traded up 18%, or 54 cents, to $3.54 on volume of 871,023
shares, more than four times its average daily volume of 200,105. Advanced Fibre
recently advanced 6.7%, or $1.05, to $16.77 on volume of 1.4 million shares, above its
average daily volume of 1 million shares.
Westell's performance Thursday is also vote of confidence that DSL telephone lines
won't be banished because of cable modems. Cisco Systems Inc.'s (CSCO)
announcement that it is buying Linksys Group is a validation of DSL as a high- growth
market, Westell Chief Executive E. Van Cullens said.
"There had been some people thinking that DSL wouldn't (be able to) take on" the
cable modem players, said Cullens, who is also company president.
Over the last year, high-speed Internet customers used cable modems over DSL phone
lines at a rate of 2-to-1, said Cullens.
Cisco said it is buying Linksys for $500 million in stock.
Linksys, Irvine, Calif., has one of the most extensive array of routers and other
equipment used in home networks, which have become popular as high-speed Internet
connections and households with more than one computer become common. Some
market watchers associate home networking with DSL.
Other beneficiaries of Verizon's foray, according to Moreau, the Robert W. Baird
analyst, will be Tollgrade Communications Inc. (NasdaqNM:TLGD - News) , a Pittsburgh
telecommunications systems tester, and Minneapolis broadband network equipment
maker ADC Telecommunications Inc. (NasdaqNM:ADCT - News) . The companies'
shares recently traded up 2.8% and down 0.4%, respectively.
Meanwhile, Adtran Inc. (NasdaqNM:ADTN - News) , a Huntsville, Ala., supplier of
high-speed telecommunications products, will also likely benefit from Verizon's
expansion.
Adtran's shares recently traded up 6.1%, or $2.07, to $36.11, on volume of 1.3 million.
Average daily volume is 814,700 shares.
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