Telecommunications - Fixed
Line
May 19, 2008; Page R9
Gutsy calls that bucked the conventional wisdom helped
analysts in the fixed-line telecommunications sector shine during 2007.
![[hasan]](http://s.wsj.net/public/resources/images/BS-AA204C_TELEF_20080516181031.jpg)
No. 1 in the group, Qaisar Hasan, an analyst last year
at Buckingham Research Group Inc., grew skeptical of Level 3
Communications Inc.'s outlook, which he thought was too bullish. He
downgraded the stock to hold from buy in April and to sell in September.
The shares slid 46% last year, including a 41% drop during his sell
rating.
Mr. Hasan, 36 years old and based in New York, also
advised investors to steer clear of Vonage Holdings Corp., which
provides telephone service over the Internet. Mr. Hasan felt that the
company's management didn't understand how much competition it would
face. He had a sell rating on the stock for about eight months, when the
shares lost more than 80% of their value.
Now working at AllianceBernstein LP, Mr. Hasan says his
pick for 2008 is Time Warner Telecom Inc., which sells phone
services to businesses and telephone companies.
Second-ranked Joseph Bonner, at Argus Research Co. in
New York, looked far and wide for phone companies he thought were well
positioned to post gains. He found Brasil Telecom SA, which
returned 101% after he put a buy on it in February.
TOP GUNS
![[See the full report]](http://s.wsj.net/public/resources/images/it_binoculars06292005183453.gif) 1
"The country is growing so fast that there was a lot of
opportunity," says Mr. Bonner, 49.
He also made a solid call on phone giant Verizon
Communications Inc. He kept a buy rating on the stock until late
May, for a return of almost 17%.
Going against the grain and thinking beyond the big
names helped Barry Sine land the No. 3 spot. At a time when investors
were worried about the state of the fixed-line telephone business, Mr.
Sine saw opportunity in rural provider Shenandoah Telecommunications
Co. (1)
Mr. Sine, an analyst at Oppenheimer & Co. last year,
thought investors were mistaken in overlooking the rural provider since
it didn't face the same threat as many urban phone companies from
services offered by cable companies. A buy rating all year returned 55%.
Footnotes:
(1) Analyst or research associate or household member
has or had a position in the stock.
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