The Cramer Report - April 10, 2006
HOME	'Telco Turnaround'	AV  (AVAYA INC)
	Avaya is making a comeback.  I'm talking about the nation of Avaya! I never thought I'd see the day when AV would be worth buying again, frankly.  I have to tell you, I had written this one off, as well as a host of the telco sector.  You know, a lot of these I just never thought would bottom. I never imagined I would be hitting what I guess I have to do.  I have to hit the triple buy button for avaya... buy, buy, buy! But it looks like AV's time has come. If you're like most people, you probably don't have a clue what AV does. AV is a telco co.  They're the next part of what I'm calling 'the Cramer Telco Reunion Tour.' We had the Cramer tech rally which, by the way, is still rolling in the gadgets and some of the chip makers.  Now, we've got 'the Cramer Telco Reunion Tour.' And it features some stocks that have taken some profits here: JDSU AMCC BKHM MSPD And now, Avaya (AV) ! AV is becoming a full-stop provider of all your voice over internet protocol (VoIp). Here's the deal: Right now, everybody on the street is ready to crown Cisco (CSCO) king of the corporate VoIp market. CSCO has the largest market share. It's taken a lot of JNPR's share and their incumbent in a lot of corporations.  They are doing well; I think they've got a big upside for the qtr.  Not an Alcoa (AA) upside, but a big upside. AV has something big on CSCO.  You see, it's dirt cheap!  Plus, the guys at Morgan Stanley just put out a survey showing that AV is running ahead of the most analyst and investor expectations in converting their 25% market share in the enterprise phone market space, and signing up people for VoIp. The Morgan Stanley survey?  Very eye-opening.  Changed my view.  It went from 'don't buy.  Don't buy,'  to  buy, buy, buy! But why have any conviction in AV?  Can't CSCO just crush them? Cramer has conviction because of the numbers. In the last 12 months, 23% of the companies that have deployed this VoIp technology have gone with AV.  That's compared to 11% in the previous 12 months. Over those same two periods, CSCO went from 25% to 24%.  Av is catching up. I think they're the best way to play the enterprise VoIp market. Still not enough reason, though, for Cramer to get on board. Cramer used to hate AV, remember?  I wanted to tell you to sell it.  It's just that the thing is just such an unquestionable buy here. The co.'s been buying back stock like it's going out of style.  They bought back 18.5 million shares in their fiscal 2nd qtr., and they've got enough money left in their buyback program to purchase another 5.3% of the float.  Man, that's a 'mon-back buyback.  That means something! So I think you should be buying AV.  But not immediately.  There's a lot of chatter about the March qtr. Shortfall because of manufacturing issues that they talked about in their December conference call. That chatter's why AV shares haven't rallied with CSCO on the strength of VoIp. If you're daring, you can pick up a little AV now.  But, if you were prudent, you'd take what I say and wait until they report, before starting a position. I usually give you something that I'd like you to start buying soon.  I'm trying to give you some things that will come down and then you can sink your teeth into. Bottom  line:  I think AV is the next telco co. To come back from the dead!  And that means I think you should stop selling it, and start buying it!