Through The Fly's Eyes: Level 3 Communications

from Theflyonthewall.com








Level 3 Spikes In Price Due To Acquisition Speculation

Level 3's (LVLT) stock has not done very well since it reported results in late October, essentially ticking down in price while the market has been rising.

However, during the past few days, investors rediscovered this stock. Speculation picked up that Level 3, which has been doing some acquiring, might be acquired. However, acquisition or not, the fundamentals are improving for this company:

* Gross margins improving nicely
* Customer reception of new product portfolio very solid
* Indications that business will further improve
* $2.2 billion a year in core revenue, growing 26% organically
* Operating margins are improving

Level 3 is seeing substantial demand for its 10 gigabit products, the high-end product for telecom. Whether Level 3 gets acquired or not, fundamentals should drive this stock higher.