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From the "fundamentals eventually do count" department: Often when a company blows up you can look back and see one or two analysts who had veered from the pack by downgrading the stock but who, at the time, were considered irrelevant.

Which brings us to Steve Levy of

Lehman Brothers

and Eric Buck of

Donaldson Lufkin & Jenrette

, who are staking their reputations on going against the grain on


(LU) - Get Free Report

with longtime recommendations that their clients avoid the stock. So what if it has gone straight up in their faces? Spend a few minutes with each, and read their reports, and you can see they're very serious when they say Lucent's fundamentals never warranted its stock's lofty heights (even though earnings were advancing at a healthy clip) and that one day investors will wish they had heeded their warnings.

They're so convinced they're right that late last week both turned up the intensity of their concerns in notes to clients. "A valuation call on Lucent has fallen on deaf ears during the company's short-lived history as an independent company," wrote Buck, who has been negative on the stock from the day it was spun off from


(T) - Get Free Report

in early 1996. Added Levy, who turned against the company last August, "If the December quarter's issues are actually a sign of cracks in Lucent's armor, then picking the bottom could become an even more creative exercise than setting the price target for the upside." His current fair value on the company s 75 to 85; it currently trades at around 100.

How can these analysts be so negative on a stock that is such a widespread Wall Street favorite? Can they really be right, and can some 30 other analysts be wrong? Or, as a Lucent spokewoman suggests, are they simply unfamiliar with Lucent's business? Familiarity is the least of their problems: Both are veterans of tracking telecommunications, having covered and/or worked in the industry for more than a dozen years. Familiarity is the reason they're so negative. ("When they say they have leadership in the networking field, that couldn't be further from the truth," Buck says.) And can some 30 other analysts be wrong? Happens all the time. ("I don't do this lightly," says Levy, who says he's "puzzled" about why so few analysts are concerned about what he perceives to be the company's creaky fundamentals.)

One reason for the lack of interest in their opinions is Lucent's performance: Last year profits rose a robust 79%, capping off two impressive years of growth. But Buck says much of the bottom-line growth was the result of cutting bloated operating expenses inherited from AT&T. "The question," he says, "is how far can you go with that? They're getting near the completion of that process." He says that means earnings will have to grow more in line with revenue growth, which last year was 14%. The analysts raise other issues, including rising receivables and the contribution of non-operating issues, particularly excess returns on its pension portfolio. And Levy believes Lucent's pending merger with


(ASND) - Get Free Report

will create the mother of culture clashes. "If Ascend and Cascade had cultural issues, I can't wait to see Lucent and Ascend," he says.

A spokeswoman, however, says Lucent still believes earnings per share this year will grow by 30%, and revenue by 20%. "We're very optimistic," she says.

So are Levy and Buck. They say they've been hearing from more investors in the wake of the recent release of sloppy fiscal first quarter earnings, but most remain nonbelievers in their point-of-view. "I had the same scenario in Motorola two years ago," Buck says. "I made a negative call, and it was one of those stocks that when it was disappointing it went up -- because people thought they were buying a great technology stock at the bottom. Ultimately, fundamentals caught up with the stock and people appreciated having that contrarian view out there. I see the same thing now. People are buying because of the name, not the fundamentals."

As we like to say in this space, fundamentals don't matter until they do. By then, of course, it's too late.

  • Stealth ecommerce play? National Media (NM) - Get Free Report has been operating below the radar in a market where e-commerce is the rage. The company, which bills itself as the world's largest infomercial and direct-response company, was a mess a little over three months ago when it was taken over by an investment group led by Stephen Lehman, the former CEO of Premier Radio, a large operator of radio stations. Several years ago Premier was sold to Jacor Communications, another big operator of radio stations that was recently sold to Clear Channel Communications (CCU) - Get Free Report. Jacor, spurred by Lehman, became a major investor in National Media. Other new, large investors in National Media include Steve Hicks of Hicks Muse, David Salzman, former Chairman of Lorimar Television and Andy Schuon, the former No. 2 at Viacom's (VIA) - Get Free Report MTV who now runs Time Warner's (TWX) Warner Bros. Records. With Lehman in, old management was out, as was the old business model and the old name. (It's being changed to E4L.) Lehman says the company plans to merge television infomercials and radio infomercials with the company's E4L and Everything4Less Web sites. He plans to spend $120 million buying media time for those infomercials. The idea, he says, is to help brand E4L; every infomercial will start by flashing the E4L web address. "E4L will be the brand," he says. The E4L web site, meanwhile, provides a link to Everything4Less, which is really Everything4Less's name on top of Cendant's (CD) - Get Free Report NetMarket, which offer 800,000 products. Says Lehman: "Who else has layered an entirely new Internet strategy onto an infrastructure that can support an e-commerce platform built entirely on leverage?" Beats me, but if it's so great, why have so few people heard of it, and why does National Media trade at 8 7/16? "I've only been here 100 days," Lehman said. "I built Premier based on performance, and we delivered on what we told Wall Street we were going to do." He says he plans to do the same thing with National Media. Great on paper, now let's see if he can do it in practice. (National Media is part of the recently announced E-commerce Index.)
  • 3Com capers: Last month, just before 3Com's (COMS) - Get Free Report earnings (and stock) became the focus of controversy, Casey Cowell, the ex-CEO of U.S. Robotics, which was acquired by 3Com, filed to sell 1.7 million shares of 3Com stock. That would appear to be 45% of his holdings, including options. Cowell is currently out of the country and unavailable for comment.
  • To manage or not manage -- that is the question: Companies have come under fire lately for "managing" earnings. This column suggested on Friday that Superior Consultant Holdings undefined managed its earnings. That prompted analysts Bruce Hochstadt and Erik Verhoef of Everen Securities to write in a rebuttal report, "We view managing earnings as part of the position description for the CFO of any publicly traded company." Perhaps, but the word "managing," in today's lingo, isn't politically correct. It suggests the company pulls out all stops to make sure a company's earnings growth is what Wall Street expects. It works fine as long as a company isn't taking from one account to feed another, or from one quarter to help the next.
  • The scarlet word: A sure sign of trouble is almost always when the CEO of a company uses any variation of the word "challenge" in its communications with shareholders. On that note: In a press release on Friday, Greg Sloma, president of Data Transmission undefined -- no stranger to this column -- acknowledged that 1998 "was a challenging year" for his company.

Herb Greenberg writes daily for In keeping with the editorial policy of TSC, he does not own or short individual stocks. He also does not invest in hedge funds or any other private investment partnerships. He welcomes your feedback at Greenberg writes a monthly column for Fortune and provides daily commentary for CNBC.