Subject: [NEXTEL-1] KNOBIAS: RAiDAR Story-NXTL

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Nextel is Money Manager's favourite, an interview with The Wall Street Transcript

KYLE PRECHTL LEGG is President, Chief Investment Officer and Portfolio Manager of Legg Mason Capital Management, Inc.

Friday , September 19, 2003 16:48 ET

New York City, New York, Sep 19, 2003 (The Wall Street Transcript via COMTEX)
-- Seven Money Managers examine portfolio management strategies in this 29-page
Investing Strategies Report from The Wall Street Transcript, available at
(212/952-7433) or http://www.twst.com/info/info807.htm

TWST: Would you begin with a brief overview of Legg Mason Capital Management and
the portfolios you manage?

Ms. Legg: Legg Mason Capital Management manages institutional separate accounts.
Our separate account assets under management approximate $8 billion. Our clients
are predominantly from the public, corporate, and endowment and foundation
sectors. The vast majority of our clients are invested in our large cap product,
Value Equity. These portfolios are constructed in line with Bill Miller's Value
Trust mutual fund, which is the firm's flagship fund. We also have a mid-cap
product where portfolios are based on Lisa Rapuano's Special Investment Trust
mid-cap fund. Lisa also serves as our Director of Research. Finally, we manage
several "all cap" accounts. Jay Leopold works with Bill Miller and me on these
accounts, which aggregate our best ideas across all market capitalizations.

TWST: Is your overall philosophy value driven?

Ms. Legg: Our philosophy is valuation driven rather than traditional value style
box driven. Our work focuses on valuing businesses. We buy fractional ownerships
in companies at large discounts to our assessment of their intrinsic business
values. Assessing business values is not easy. Traditional metrics such as p/e
and price/book multiples are usually too simplistic on their own to be
particularly useful measures. What we are trying to determine is the present
value of a company's future free cash flow. That is the value of the business.
We apply as many valuation metrics as are applicable to the situation in an
effort to establish a range of probable values under a variety of scenarios. We
want to make purchases at large discounts to the most probable business value,
or the "central tendency" of value.

TWST: Why do you have an overweight in telecom when many of those stocks are
trading at multiples that are pessimistic on normalized earnings?

Ms. Legg: Our sector allocation is a result of our security selection process.
In the case of telecommunications, we have two companies in our portfolio,
Nextel Communications (NXTL) and Qwest Communications International, with Nextel
accounting for the majority of our telecom investment. Part of the reason for
our high weighting in Nextel, which currently accounts for 7% of the portfolio,
is the stock's strong performance - it has risen more than sevenfold from its
low in June 2002 and roughly doubled our average cost. Nextel has been in our
portfolio since 1999 and we have always liked the company's strong competitive
position in the highly profitable business wireless services market, its
differentiated product and its shrewd management team with a track record of
rational capital allocation. The company experienced significant pressure in the
first half of 2002 in the wake of the accounting scandals and the credit crunch,
as investors shunned any company that had a highly levered balance sheet and
that was valued on an enterprise value/EBITDA basis. At one point, the company's
solvency was called into question by bearish investors, even though its
operating fundamentals remained strong. However, our thorough analysis of
Nextel's capital structure, debt maturity, bank covenants, and capital needs
convinced us that Nextel probably did not face the liquidity crisis that was
discounted into its stock price as a virtual certainty. We significantly
increased our holdings in the first half of 2002, buying more shares as the
price dropped to low single digits. The stock has been one of our best
performers in the past 12 months and now trades in the high teens.

This Investing Strategies Report includes:

1) Valuation-Based Investing - Kyle Prechtl Legg, President, Chief Investment
Officer and Portfolio Manager of Legg Mason Capital Management, examines
portfolio management strategies in this timely and deeply informative 4,500-word
interview from The Wall Street Transcript.

2) Investing in International Equities - James M. McAlear, Senior Equity
Portfolio Manager & Deborah Snee, a Portfolio Manager, Columbia Management
Group, examine portfolio management strategies in this timely and deeply
informative 4,500-word interview from The Wall Street Transcript.

3) Outlook for Business & the Economy - Donald C. DeLutis, Chairman of Orrell
Capital Management Inc., examines portfolio management strategies in this timely
and deeply informative 4,200-word interview from The Wall Street Transcript.

4) Socially Responsible Investing - Robert C. Barringer, a Vice President and
Portfolio Manager for Citizens Advisers, examines portfolio management
strategies in this timely and deeply informative 4,700-word interview from The
Wall Street Transcript.

5) Active Management & Client Customization - H. Phillip Becker, President &
Harold M. Rosen, Executive Vice President, H.P. Becker & Co., examines portfolio
management strategies in this timely and deeply informative 4,000-word interview
from The Wall Street Transcript.

This interview is a small excerpt from a comprehensive interview published in
The Wall Street Transcript on 09/22/03.

Kyle Prechtl Legg, Legg Mason Capital Management

CONTACT: The Wall Street Transcript Corporation
67 Wall Street, 16th floor, NY, NY 10005, USA
(212) 952 7433
(212) 668 9842
[email-masked]

URL: http://www.twst.com
The Wall Street Transcript is a premier weekly investment publication interviewing market professionals for serious investors for over 36 years.

Copyright 2003 Wall Street Transcript Corp.

-0-

INDUSTRY KEYWORD: General Investing

Public Companies Associated
with this story:

LEGG MASON, INC. (NYSE: LM)

NEXTEL COMMUNICATIONS, INC. (NASDAQ NM: NXTL)

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