John, Here is what SG Cowen put outfor Optical Networking.
Looks like we get a boost next week, just think if we were actually going to be at the meeting!
Thursday, Mar. 2, 2000 13:27 PDT
By SG Cowen, Special to America-iNvest.com
As a prelude to the Optical Fiber Conference that begins Monday in Baltimore, SG Cowen revealed its top optical picks.
Advanced Fibre, (AFCI) -- A leading vendor of telco access equipment targeted at urban and low-line-density rural/suburban markets. AFCI has taken a lead in providing broadband features, an emerging trend in telco access technology to integrate voice and high-speed data in the local loop. Our enthusiasm is supported by several factors: 1) A macro shift in spending with carriers again focusing on access. 2) Several large specific carrier opportunities are emerging suggesting upside to 2000 estimates. 3) A strong new product story. 4) A financial windfall from the Cerent sale to Cisco with AFCI owning $6+/share of Cisco stock.?
Ciena (CIEN) -- CIEN is a leading vendor of fiber-optic transmission products specializing in dense wave division multiplexing systems (DWDM) designed to increase the capacity of an optical fibre by simultaneously operating at more than one wavelength. The company has expanded its competitive advantage with OC-192 and ultra long-haul capabilities and has branched out into wavelength switching and multi-service access via acquisitions. Recent news of customer and product diversification indicates that Ciena is becoming a major systems vendor, with more wins likely. Given the strength of the optics industry, and that Ciena is one of the few pure systems plays, we continue to rate it strong buy.
Harmonic (HLIT) -- HLIT is a leading supplier of fiber-optic transmission systems used to enhance bandwidth, improve signal quality, and provide an appropriate platform for two-way communications to cable operators and MSOs. HLIT?s optical technology expertise is at the core of the current upgrade activity. The strong domestic trends in the CATV industry are propelling the company?s position in the digital video space, with HLIT potentially gaining share in this segment as open cable standards are initiated in mid 2000. We continue to rate HLIT strong buy.
JDS Uniphase (JDSU) -- JDSU is the leading merchant provider of fiber-optic communications components and modules to the telecom and CATV industries. JDSU is well positioned to take advantage of network build and upgrade opportunities in the telcom space as demand for its lasers, modulators and amplification products used in communications systems is showing strong, sustainable growth, driven by increased data traffic and ongoing services deregulation. Via the recent merger between Uniphase and JDS, the company is now raising the competitive bar by offering active and passive components and distancing itself from the competition. Lastly, the company continues to strengthen its position and share through both internal development and an aggressive acquisition strategy. While valuation is currently high, the company is emerging as the major high growth vehicle in an industry still in its infancy. This, plus the fact that few alternative investments, should maintain a high valuation. Our 6-9 month price target is $250-275.
SDL (SDLI) -- The deployment of WDM technology has created a nearly insatiable appetite for specialized pump lasers, a niche dominated by technology leader SDL. That exploding market is currently driving revenues and earnings to record levels, at trend that is likely to continue.? |
