ADC Telecommunications knows what matters is broadband's last mile

For F2009, analysts expect a 20-25% revenue decline, on sagging demand for copper/fiber optic solutions, due to the U.S. and global recessions.

The growth proposition with ADCT? Analysts remain confident that ADCT's China business, called Century Man, will yield promising returns, as a result of its participation in China's assertive 3G network build-out.

Further, a domestic broadband stimulus package in the U.S. may provide an additional tailwind. The First Call F2009/F2010 EPS estimates for ADCT are 13 cents to 39 cents.

The risks include: any failure to maintain cost cuts/expense discipline, a longer than expected decline in telecom spending, or the loss of a large customer(s).

Stock Analysis: ADC Telecommunications is a moderate-risk stock. Consider buying a 25% position in ADCT now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your ADCT position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $3.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.