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Tuesday, July 11, 2006

Calls of Note Part 5

- Raymond James positive on Arris (NASDAQ:ARRS) noting Comcast recently announced hiring initiatives in several markets to meet installation demand for VoIP services.

Specifically, cable trade press publications report that Comcast intends to hire up to 900 people as it ramps to meet demand for new VoIP telephony services. It was reported that Comcast is targeting 500 people in the San Francisco area and an additional 400 people in New England. The bulk of these new hires will likely be front-line technicians and customer care representatives. Given anecdotal reports that some customers have encountered installation difficulties, these new hires go a long way to fix early customers' snafus.

Firm believe this is a very encouraging anecdote relating to the deployment ramp of VoIP service. Reminds investors that, to date, Comcast has sourced the overwhelming majority of its voice modems (E-MTAs) from Arris.

Reiterates Strong Buy rating with a $15 price target on ARRS based on the stock trading at 17x (represents the mid-point industry multiple for telecom equipment stocks) 2006 EPS estimate of $0.88.

Notablecalls: Buy it for a bounce close to the 200 day moving average.

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