Yes, that was my first one line post in quite a while. In August, I posted the last quarter's results from JDS Uniphase on this board in regards to revenue growth, flow ratio, the three margins (gross/net/cash king) as well as cash-to-debt ratios which we use at the Fool to identify Rule Makers. If you don't want to search back in August for my post, you can review the Fool write up on JDSU's numbers here:
fool.com
Many of our large-cap Kings and Gorillas pass the selected criteria items and JDS Uniphase was an addition to that portfolio at the Fool this year because of it. In brief, the balance sheet and income statement is solid. When you couple this with the amazing revenue growth JDS Uniphase turned in last quarter (over 170%), I was just stating that it didn't appear to me that from a fundamental analysis point of view that JDS Uniphase and Qualcomm could compare if you look back at the first two quarters of 2000 at Qualcomm's numbers. I can say in retrospect (because I held all my QCOM shares through it all and am still holding ) that the quarterly numbers weren't supportive of the valuation that Qualcomm ran up to in the 'mania'. Had there been revenue growth of 200%+ perhaps we wouldn't have seen the decline in share price that we saw.
Through the second quarter, they were carrying about $614 million of accounts receivable and other financing for Globalstar on its balance sheet, meaning the company's losses from Globalstar could have been a factor. In retrospect, we can can certainly add thoughts about valuation, EPS, China or whatever. Yet, as earnings and revenue growth improve for Qualcomm, the stock will react
I realize you were talking about momentum, psychology and sentiment. I was simply saying that I don't see the same thing in terms of a balance sheet or income statement between the two. That being said, it's obvious that JDS Uniphase ran up pretty high in the 'March Mania' as well. Up to $153 3/8 in March and sitting now at $107 15/16 for a decline of 30%. Concerns about IP/Broadband spend as well as the two major acquistions this year have weighed on the outlook for investors.
(And, since my comments were obviously based on my feelings for the Short Term, do you think balance sheet considerations might play a part in short therm stock performance?)
You know, I'd like to think so from a fundamental point of view. However, how many investors that focus on the short term are running balance sheets and income statements to come up with a 'check up' on each company they are in pursuit of in their portfolio? I follow JDS Uniphase's quarterly numbers. In the short term, when it dipped down in the 90's I saw more attraction to it from my point of view for additional shares than I did at $135 or $150. That's not saying that I hold some stocks that are very extending on a valuation point of view, but their balance sheets or in pretty good order. That may not hold the stock prices where they are, but if the revenue growth and earnings growth continue in the tornado phase over the next few quarters, some of them should find support along the way.
I don't play or understand the short term game, so I'm afraid I can't address that issue. I feel more comfortable as a tortoise. A tortoise likes a good balance sheet.
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