Re: [CANSLIM] WCOM

From: "Jay Cliburn" <jay@hobo.idec.sdl.usu.edu>
Subject: Re: [CANSLIM] WCOM
Date: Wed, 10 Sep 1997 10:56:45 -0600

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Joy,

I have a special interest in WorldCom, inasmuch as it
is one of the very few large corporations with headquarters
in my home state of Mississippi.  It is the ONLY Fortune
500 company headquartered in Mississippi.  As a result, I
follow its doings fairly closely.  I do not own any of its
stock.

The following numbers come from Daily Graphs and IBD.
WCOM has an excessively large float -- by CANSLIM standards
anyway -- of 883.8 million shares.  Funds and banks own a
combined 34% of it.  RS is 80.  EPS is 4.

Annual EPS have been choppy:

1991	 0.20
1992	-0.02
1993	 0.41
1994	-0.48
1995	 0.64
1996	 1.02

Quarterly EPS have likewise been unstable:

09/30/96	0.27 v 0.18 +50%
12/31/96	0.29 v 0.16 +81%
03/31/97	0.05 v 0.21 -76%
06/30/97	0.08 v 0.25 -68%

Much of WCOM's earnings variation is related to acquitision costs.
As you well know, WCOM announced a deal Monday whereby it
intends to acquire Compuserve's and AOL's network infrastructure,
among other things, for approximately $1.2B.  Investors have
reacted favorably to this news.  In a larger sense, the company
has been on an acquisition binge of late.  Back in 94 (I think),
it acquired WilTel.  Last year it acquired MFS (who had recently
acquired UUnet).  There have been other acquisitions as well,
but the WilTel/MFS/UUnet/AOL/Compuserve deals are the most notable.
These most recent acquisitions are clear evidence that the company
wishes to accomplish two main goals:

	1. Establish a stronger foothold in local phone markets.
	2. Establish a dominant position in the internet
	   infrastructure arena.

Uncertainty in the telecom industry surrounding the final
implementation of the Telecommunications Act of 1996 should weigh
heavily in your investment decision.  Watch closely for news and
court decisions related to the Act.

My take on WCOM is that it'd be a good long-term play, but it
really isn't a typical CANSLIM candidate.

Hope this helps.

Regards,

- -- 
Jay Cliburn                      |  Space Dynamics Laboratory  
Computational Sciences Division  |  1747 North Research Park Way
Jay.Cliburn@sdl.usu.edu          |  Logan, Utah, USA 84341
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