Subject: [NEXTEL-1] Telecommunications: Wireless

From: Marcel <[email-masked]>
Date: Tue, 13 May 2003 00:43:21 -0400

BEST ON THE STREET

Telecommunications: Wireless

By JESSE DRUCKER
Staff Reporter of THE WALL STREET JOURNAL

In another tough year for the wireless-telecommunications sector, there
seemed a simple way to make money: knowing when to buy Nextel
Communications Inc. stock.

Craig Mallitz, a 32-year-old analyst at
Baltimore-based Legg Mason Wood
Walker Inc., a subsidiary of Legg Mason
Inc., earned top honors for 2002 by
moving Nextel between "buy" and "hold"
during the year. "You can make money in
wireless but you have to be careful not to
take the line that all the carriers are created
equally," says Mr. Mallitz.

Indeed, Nextel generated a total return of
86% for the parts of the year he
recommended it, while the stock returned
just 5.4% for the full year. He also captured declines in Sprint Corp.
PCS Group, Airgate PCS Inc. and Alamosa Holdings Inc. with "sell"
ratings in June. While other picks for the year lost money, his
downgrades would have helped investors avoid even bigger losses for
the full year.

Mr. Mallitz -- who shared responsibility for covering the sector for
most of last year with colleague Sean Butson -- still recommends
Nextel, citing its phones' unique, walkie-talkie-like "push-to-talk"
feature, which will soon be available nationwide, and its moves to
reduce debt. Mr. Mallitz is in a unique position to understand the
company: He worked there for 2 1/2 years before joining Legg Mason.
(And Legg Mason owns 9.3% of Nextel's Class A common stock,
making it the company's biggest stockholder.)

Mr. Mallitz is slightly more cautious about Nextel over the long term
because its push-to-talk feature is likely to face competition eventually.
"In three to five years [there] could be an equivalent," he says. He also
likes AT&T Wireless Services Inc., with its increasingly strong network
and simplified price plans.

Greg G. Gorbatenko at Loop Capital Markets LLP in Chicago placed
second in the wireless-telecom group. His best pick also was Nextel,
which generated a whopping 273% return while he rated it "buy" from
early July until the end of the year.

He thinks the smart money still
goes with Nextel, because the
push-to-talk feature, now used
mostly in blue-collar industries
such as construction and trucking,
is expanding into white-collar
sectors. Plus, the company's
costs to acquire new users remain low, and its "churn" -- the rate at
which users leave for another carrier -- is the industry's lowest.

He also did well with Boston Communications Group Inc., a wireless billing-services
provider in
Woburn, Mass., that had a total return of 32.4% during the time he recommended it as a
"buy." For
2003, he remains positive about Nextel, but he isn't overly optimistic about the rest of
the sector. "There
are just too many competitors out there," he says.

Vera Rossi, 33, of New York-based Morgan Stanley, who covers Latin American wireless
telecom
stocks, came in third. Her only positive return was on Brazil's Tele Nordeste Celular
Participacòes SA,
which returned 1.8% while she rated it a "buy" until early March. But she also scored with
"sell" ratings
on stocks that declined. "In most of the stocks it was better not to be in them," she
says.

Write to Jesse Drucker at [email-masked]

Telecommunications: Wireless
25 Analysts, Median Score = - 123.5
Analyst
Honors
Firm
Notes
Performance
Score
Craig Mallitz

Legg Mason

89.4
Greg G. Gorbatenko

Loop Capital Markets

77.7
Vera Rossi
2
Morgan Stanley

57.0
Daniel Henriques*

Goldman Sachs

34.0
Luiz Carvalho
2
Morgan Stanley

-18.1

See a chart of the top five stock pickers in all 49 industries, including the survey's
methodology and
footnotes.
http://online.wsj.com/article_email/0,,SB105164971088826400,00.html?

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