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Technology Stocks : Optical Networks and Components, DWDM and Tunable Lasers

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To: songw who wrote ()	6/23/2000 12:27:00 PM
From: David Einstein	of 275

From briefing.com Bookham Technology plc (BKHM) 59 +5/8: If Bookham Technology plc (BKHM) were based in the Silicon Valley, the company would probably sport a market-cap 2-3 times its current level... The UK-based designer of optical components for use in fiber-optic telecommunications networks has traded in relative obscurity since its initial public offering two months ago. While stock has lagged the group, recent pick-up in volume suggests that the word is beginning to trickle out on Bookham... Issue possesses "attractive" fundamentals relative to recent fiber space deals to hit the market. This in no way implies that the stock is cheap. In fact, with a P/S ratio of 576x trailing sales, the valuation seems absurd; that is until you compare it with the multiples being awarded other companies in the space. For example, optical networking equipment company, ONI Systems (ONIS), currently sports a P/S of 2790x trailing TTM. And, while ONIS will turn in quarterly losses for the foreseeable future, BKHM is predicted to deliver its first profitable qtr next year... A major reason stock has failed to pop up on many radar screens is its relatively large initial float. The company came public with 19.4 mln shares, vs just 8 mln for ONI Systems. The smaller the float, the easier it is for traders to run the stock... While traders may view a large float as a hindrance, the increased liquidity provided by the increased number of shares is considered a positive by institutional investors... The liquidity will come in handy later this month when institutional investors are forced to purchase the issue based on its scheduled addition to the FTSE 100 Index... Damon Southward, Briefing.com

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