G,
Numbers look very healthy
Very healthy is an understatement. It can be very frustrating owning this sector- we always seem to be the whipping boy for one thing or another. Whether it is fears of a cyclical slowdown, a dampening of DRAM prices, or even overspending by the semi makers, lately we have had very few great weeks. Or even good ones for that matter.
On the other hand the fiber optics guys like JDSU trade at stratospheric valuations. Yet over the coming 10 years(on average), I doubt their growth rate will much exceed AMAT. As a sector becomes profitable, more entrants arrive bringing margins down. JDSU or the fiber optics guys are no exception, yet the street has yet to realize this.
With the internet, broadband, and wireless increasingly playing a role in the cyclicality, or lack thereof, in the SCE sector, we should see more favorable valuations since the cycle should be smoothed out. Fiber Optics are useless without the chips at either end to process data. When will the street underatnd this simple concept?
BK, on a bad day |
