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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: LindyBill who wrote (12089)12/5/1999 4:02:00 PM
From: jmanvegas  Read Replies (3) of 54805
 
LindyBill: I bought my first shares of JDSU when the company was UNPH at $40 post split - sold them shortly thereafter for a quick profit - shouldn't have done that in hindsight. But I bought back at $82-86 dollars post split when several major events were going on with JDSU at that time and all at once. The split was occurring - the merger had just been completed between UNPH and JDS Fitel - a secondary of about $700M net to the company was ongoing which brought the stock down from $90 post split to about $79-82 post split. (Reminds me of the secondary QCOM did which dropped their stock price temporarily but strengthened the company's financials dramatically.) At that time SSB came out with a major strong buy recommendation and their analysts were pounding the table including almost 2-3 times per week on CNBC. JDSU ran to the $110-120 area and sat for about 6-8 weeks consolidating a tremendous advance. The breakthrough that congestion area has led us to the current prices. But the buy IMHO should have been between the $80-110 area for early followers of JDSU and definitely the breakout of the $120 area as shown very clearly on the charts. I hope this helps in your question about where one should have known to enter JDSU. (Again, in hindsight, when I first made my purchase of UNPH was when an aggressive growth manager appeared on CNBC and touted photonics as 1 of 5 of the most important investment themes going forward for the foreseeable future.)

My question is at what market cap does JDSU become considered a gorilla candidate as opposed to a King? If they pursue their ambitious acquisition trend could they end up looking like a CSCO? Could they consolidate the major aspects of the photonics industry quickly enough including last mile solutions under their umbrella with their huge stock currency and eventually become a $150-200B company? And if not, JDSU should remain a King for the next decade, unless, of course, some more advanced technology replaces JDSU's offerings. But couldn't that theoretically happen to QCOM?

jmanvegas
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