Oclaro, Inc. (Avanex-Bookham) Message Board

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Technology Stocks : Oclaro, Inc. (Avanex-Bookham)

OCLR 8.260

0.0%

Dec 10 4:00 PM EST

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To: robert duke who wrote (1218)	12/3/2000 10:35:41 AM
From: r.edwards	Read Replies (2) of 2293

AVNX - As Cheap as it has ever been. Fundamentals Remain Strong. Buy the Stock epoch.com The stock was down another 10 points yesterday on no news. We did check in with the company and everything was indicated to be on track with previous expectations. Last quarter, both revenues and earnings were massively revised upward indicating that the company is not seeing any signs of slowdown or pricing pressure for their products. Clearly, some steam has been taking out of the sector but AVNX is very well positioned to weather a slowdown and the numbers should be conservative enough to allow for upside. The stock is now trading at the lowest valuation since going public. Here are the statistics. Avanex by the Numbers Sales Mult. EPS Mult. FYO1 $193mm 15.5x $0.25 184x FYO2 $372mm 8.1x $0.74 62x Source: EPOCH PARTNERS Looking out to FY03, it is very likely that the company could post revenues of close to $500mm. With a normalized operating margin of 20%, we arrive at a target operating profit of $100mm. Therefore, at the current $3B market cap, the stock is trading at just 30x FY03 operating profit. On an earnings basis, the stock is now at 62x FY02 EPS for a company that can easily see earnings grow a more than 50% for the next five years. For investors willing to look out a little, there will probably not be a better time to buy the stock in the next two to three years. Read our full company report on Avanex. Avanex company model.

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