Poet --
Since the two stocks are tied, if SDL's numbers are what I expect, I'm guessing any sell-off will be minor since we have JDSU reporting a week later.
Having said this, I have to admit I don't know how the S&P factor will play out. We're in orbit and the laws of gravity seem to have been temporarily suspended. We're up 69 right now. That's nose-bleed territory. Yet, if the 3.8 ratio were down to zero, we'd be at 586 --- well out of nose-bleed territory and into coronary arrest. :)
Another mention in WSJ:
interactive.wsj.com@6.cgi?mfmuse/text/autowire/data/BT-CO-20000720-007238.djml/&NVP=&template=atlas-srch-searchrecent-nf.tmpl&form=atlas-srch-searchrecent-nf.html&from-and=AND&to-and=AND&sort=Article-Doc-Date+desc&qand=&bool_query=jdsu&dbname=%26name1%3Ddbname%26name2%3Ddbname%26name3%3Ddbname%26period%3D%3A720&location=article&HI=
On the light side, Loest expects optical component maker JDS Uniphase Corp. (JDSU) and its proposed merger partner SDL Inc. (SDLI) to continue to see staggering sales growth. Both companies make parts that help telecommunications companies route traffic faster. Sycamore Networks Inc. (SCMR) and Ciena Corp. (CIEN), two other Loest picks, build the systems for optical networks.
"Ciena is growing at a ridiculous rate," he said. "Anything in optical networking, where they have good product and a good customer base should see large growth."
One good strategy for picking winning stocks, he noted, is to wait for them to fall at least 30% below their 52-week highs, as many optical players did this spring.
"With the very high growth rates in optical, you get flaky multiples," Loest said. "And they are very volatile. So we buy on a relative basis."
JDS Uniphase recently traded at 129, the high end of its 52-week range of 19 5/16 to 153 27/64. SDL, which traded as low as 28 7/8 last August, hit a one-year high of 431 1/4 earlier Thursday. . . .
Pat |
