Re Jubak on JDSU, SDLI
Apollo, a few points.
1. Jubak is generally not bad, but he's also not entirely dependable because he flits in an out of things and doesn't always follow a consistent logic (as we try to do here).
2. As for his characterization of JDSU's strategy of dominating the market in its sector, he is correct. He is also correct that this has involved, and will continue to involve, lots of acquisitions.
3. His point that such a strategy carries risks, both because the acquisitions might not be digested easily and because fine execution is required going ahead in such a rapid-growth move, is also correct. BUT--IMO it is not a reason to avoid JDSU, because the track record is good (the main merger, between Uniphase and JDS-Fitel, appears to have gone off amazingly smoothly) and Kalkhoven and Strauss (U and JDS leaders, respectively) have provided excellent leadership. The stuff Jubak is worried about is merely, again IMO, one more reason--in addition to its royal status--that the stock should be held lightly rather than gripped tight in our greedy little hands like that of a real gorilla.
4. Moreover, the potential reward for the strategy is so outstanding that it might merit some significant degree of risk. I mean, there are some who feel that if JDSU can actually execute this strategy properly they may achieve near-de-facto-gorilla status, simply because they will have a lock on such a high proportion of the world's technical expertise in their particular area.
5. SDLI, finally, is an excellent company that does indeed have fine prospects. It is a competitor of JDSU's, but is much smaller and specializes in a narrow product niche rather than the whole spectrum of opto-electronic components. It is almost certainly going to be an excellent short, medium, and longterm investment for its shareholders, because the whole sector is exploding upwards in a tornado. But JDSU is the clear king here, and so GGers should prefer it on that basis.
tekboy/Ares@BWTFDIK.com
PS I note that indepedently Mariner gave an almost identical answer; good sign. |
