RE:JDSU
1) The market for the fiber optic sector is going through the roof.
2) Last quarter LU announced that they can not meet demand for the sector.
3) Today Corning says that they can not meet demand.
4) JDSU has been saying the same thing for months.
5) JDSU is getting bigger and bigger.
6) The broadband story is just beginning.
7) The thread still thinks that JDSU is a king even though the author of the manual has crowned the company a gorilla.
8) I know FM was late with crowning QCOM a gorilla but do you all really think that he is wrong again by calling JDSU a gorilla.
9) Are we looking at this company closer than we should?
10) For us all non-tech people in this thread, can someone in one sentence tell us why this company is not a gorilla.
11) Shouldn't we all take more risk with this company?
12) If this company has been crowned a king (gorilla?) than why are the founding fathers of this thread paying more attention and investing in smaller potential gorillas of tomorrow like CREE, ELON, GMST, SEBL, and CITX.
Here is a commentary from today's briefing.com:
etrade.com
08:40 ET ******
Corning (GLW) 170 1/4: We'll call this today's lesson in valuation
analysis. As of last night, Corning's P/E ratio on 2000 earnings was
72. The one-time glass-works trading at 72 times earnings!? Crazy,
right? This morning's news shows the dangers of assuming that the
"E" in a forward P/E ratio is accurate. Corning issued a positive
preannouncement, indicating that Q1 earnings will be in the
$0.53-0.55 range relative to the current First Call estimate of $0.48.
That's a 10-15% improvement. Apply that to the full year's earnings
estimate and suddenly the P/E is down to 63. Apply the improved
growth to next year's estimate, and we're down to 51. The reality is
that a forward P/E is only as good as the E, and sometimes the E
isn't so good. In the fiber optic industry that is particularly true, as
sell-side analysts' intentionally low-balled estimates are not keeping
pace with growth in the sector. Corning, which Briefing.com has
highlighted on several occasions as a relatively cheap fiber optic play,
said this morning that the earnings surprise was due to demand for
the company's LEAF optical fiber. We're not talking about new
photonic switches or the erbium-doped amplifiers, this is the actual
fiber. And not surprisingly, demand for that fiber is booming. LEAF
fiber is used for networks greater than 50km in length and allows for
maximum DWDM capabilities; it has been deployed by such
companies as AT&T, Williams Communications, Level 3, and Cable
& Wireless. The first indication we had that demand for fiber optic
products was exceeding market expectations was, ironically, the
Lucent (LU) warning back in January. In that warning, Lucent noted
that it had been unable to meet demand for its higher end DWDM
products. With this GLW preannouncement, we see more of the
same: demand for the latest, greatest fiber optic technology is
booming. This is good news for the entire industry. If demand for the
actual fiber is exceeding expectations, then it is safe to assume that
the DWDM equipment sold by Lucent (LU), Nortel (NT), Cisco
(CSCO), and Ciena (CIEN) is strong; that the amplifiers sold by
Corning, JDS Uniphase (JDSU), and SDL (SDLI) are strong, that the
long haul transport equipment sold by Qtera (part of NT) and privately
held Corvis are strong; that the photonic switches either being sold or
under development at Sycamore, Agilent, and Xros (part of NT) are
strong. In short, there are a lot of "E"s out there that are too low. Yes,
the forward P/Es are extreme, but the question is, how good is the E?
For Corning it was too low. It's probably too low for most of the fiber
industry. - GJ |
