Tomahawk, WI 9/17/2013 (BasicsMedia) –  Alcatel Lucent SA (ADR) (NYSE:ALU) offers worldwide services in terms of video, data and voice tom its large pool of customers which include governments, businesses and service providers. The company has 25 subsidiaries which it wholly owns. It has been recently listed as one of the major stocks to keep a watch on. This is not something you will see when you take a keener interest on this stock. Everywhere you look, you are likely to come across information indicating that this stock has probably hit rock bottom, or is on its way there. Is this justified?

 ALU’s Impressive Market Cap

Currently, ALU’s market cap is around $7.72 billion. There are close to 2.27 billion shares of this company which are still outstanding. The question which needs to be answered is whether this stock has actually hit rock bottom and is now on its way back up or not. This is the issue which investors have to consider with regard to Alcatel Lucent SA. Regardless of how much you think ALU is worth, chances are that you are undervaluing it. This stock is worth more than what people tend to give it credit for. Perhaps people are fond of undervaluing the ALU stock.

Two things have taken place in the last week or so regarding ALU, and which investors have to be made aware of. First, ALU had been in agreement with SaskTel in Canada to test some fiber optic line with the capacity of 400 gigabytes per second. The company announced that it has concluded testing this fiber optic line and is pleased with the results. Second, analysts at MKM Partners have given the stock a boost of around 44% in its price target. These two happenings have been well received in the market and this has led to an increase in the company’s shares.

 Can ALU Make Money from the SaskTel Project

 What I’m concerned with in relation to the SaskTel project is the fact that ALU is yet to tell us how much money it will make from this. No one is certain whether the company stands to make any money at all from this fiber optic line project in Canada. Investors love profits and the latest financial results indicate that ALU is not one of the most profitable ventures in the market. This is reason enough to hold back on any excitement you might feel right now based on the two events which have recently been announced by ALU, and which may affect its financials.

 Don’t Rush to Buy ALU Stock

Therefore, based on the above reasons, I don’t think ALU stock is one which you should rush to buy and add to your portfolio. However, the stock is one which you must keep a close watch over lest you miss out on certain developments which bear a massive weight or may play a major role in determining how the stock goes from this point onwards. ALU has been burning a lot of cash, and is expected to continue doing so up to 2016. It has a debt of around $1 billion, and the fact that it is unable to generate cash or stay profitable, is not something I find attractive.

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