An 'analyst' from Strategic Analysis something ot other said on ROB TV this afternoon that in his opinion JDSU was a disaster waiting to happen, that their book value of $50 a share is all good will (water as he put it), and that his target is sol low that it would have to be censored if he were to say it on-air.....Now, this is just what he said so don't shoot the messenger (me)
Well, you know what they say: there's an idiot born every day. I'd love to take that guy to dinner and pick his brain. It certainly wouldn't take long.
Second thought, I'll skip the offer. I just listened to the broadcast and the guy was discussing NT, not JDSU:
robtv.com
Ross Healy, Strategic Analysis Corp, Toronto
Q: Fair value for NT is $25 , second lowest I’ve heard is $42, most others say under $60. You’re making it sound like Laidlaw. Are you trying to talk it down? [I assume they’re using CDN numbers.]
A: NT got swept up in high-tech excitement, then along came fiber optics and it turned out everybody and his brother was building a fiber optic network and everyone and people got extremely excited about the co. The co went up to 125 and got ahead of itself. We did a present-value analysis and went out 5 years, $125 was where it should be five years out. We decided we should discount it back. The stock has no place to go but down. Second big error was in outlook for fiber optic industry. It started out like a house afire. We’ve seen the first bankruptcy of fiber optic cable layer, ICG. Rumor of another. Co’s like GlobalCrossing. . . stock has come down. . . couldn’t raise a nickel in equity market and debt market would charge 18%. Builders frozen out of markets. Means we are likely to see an abrupt slowdown in delivery. Now all of you people out there have heard nothing but good news on NT. That’s co. policy. You have not seen bad news yet. But you are going to.
Q: NT --- it’s dropped 80. Where do you see it now?
A: I think my target of $25 may have been too high. If you look at co’s balance sheet, about 60% of equity is good will --- water. Got by acquiring suppliers. Second thing is, instead of seeing upswing in earnings and a setback, and how they come, by the way, well if we see ICG, and NT was a supplier to ICG, they hold receivables --- and the question is when do we see revisions? Because you‘ve only seen good news for two years. It is not going to receive it well when it starts to hear litany of bad news. . . .
Gotta keep you guys honest. :)
Pat |
