Friday, July 13, 2007

Global Crossing (NASDAQ:GLBC) : Actionable call alert!

- Jefferies notes Global Crossing (NASDAQ:GLBC) has has declined 11% since the beginning of the week, due to concerns about 2Q07. Firm believes pricing has stabilized and 2Q07 estimates are achievable. Reiterates Buy rating & $30 tgt.

They expect to see margin improvement in 2Q07 and 3Q07 driven by 1) a historical downtick in expenses from 1Q to 2Q, 2) management's focus on cost control and 3) cost cutting activities during the quarters primarily in the SG&A line. Jeffco believes that GLBC should be able to achieve their 2Q07 expectations including revenues of $549.3 million and EBITDA before non-cash compensation of $18.1 million.

Firm's FY08 EBITDA estimates implies a 6.9x EBITDA multiple, which is less than half the industry average. Finally, GLBC currently trades at 0.87x FY08E revenues, a discount to last year's Broadwing sale of 1.3x revenues.

Notablecalls: A beautiful call, matched only by the beauty of the stock's chart. I think GLBC makes a very nice bounce candidate today and over the next weeks. Note that Jeffco's tgt offers hefty upside to current mkt price. That's bound to create interest. Going to call this one actionable!

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