ACT Networks Encores as Hot Stock in Magazine

Each December, the dozen stock analysts at Individual Investor magazine put their heads together to compile a list of the 25 hot stock prospects for the new year, to be published in the January edition.

It seems that ACT Networks of Camarillo has found a home on that list. The company made the “Magic 25” list for 1996 and is back for 1997.

ACT Networks develops and manufactures frame relay network access products for voice, data and integrated network uses. The company’s products allow users to transmit both voice and data information on the same circuit, as opposed to the older switch-based system, which allows only voice or data transmittal at any one time.

Increased popularity of the frame relay technology helped boost ACT Networks’ 1996 stock return to nearly 400%, the best performance of any of the listed stocks. The company closed the year at $36.50 per share.

“We are very bullish on their business,” said Jonathan Steinberg, editor in chief of Individual Investor. “Frame relay is a technology that is just coming into its own, and the projections for frame relay are something like 80% growth rates going out over the next five or six years. And ACT is truly the leader.”

The New York City-based investors magazine provides the list of 25 stocks as a guide for its more than than 450,000 monthly readers. Steinberg said the average reader already is well-trained in the stock market, spending 15 to 20 hours weekly on investment research.

“They will make their own decisions, but they use us to give them direction,” he said. “We pick the 25 stocks we think that, taken as a whole, as a portfolio, will substantially beat the markets over the course of the year. For our first five years our average on a buy and hold basis is 26.3%.”

ACT Networks was among four stocks on the 1996 list that topped the 100% return mark.

Melvin Flowers, chief financial officer of ACT Networks, said making the Individual Investor list could attract valuable attention for the company from potential investors.

“We feel it could communicate our story to a group of investors who might otherwise not have heard of us,” Flowers said. “There’s no doubt, certain investors do invest according to the recommendations in this list.”