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Technology Stocks : JDS Uniphase (JDSU)
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To: SJS who wrote (15939)1/5/2001 2:22:33 PM
From: pat mudge  Read Replies (1) of 24042
 
If the growth rate of this sector is 25% (I think I am being conservative here, but you tell me.....), I don't see JDSU as wildly overvalued here with a PE of 56, or even a PE a little higher IF the sector growth rate is reasonable and sustainable.

Chase H&Q has JDSU growing 201% in 2000 and 119% in 2001.

I don't know where you get the 25% growth figure, but the RHK report I have shows the terrestrial WDM components market came in at $610M in 1999 compared to an earlier estimate of $470M.

For 2003 they’ve changed their estimates from $2.2 billion to $3.3 billion. Arrayed Wave Guides will grow from $190M in 1999 to $1.2B in 2003. Thin film filters will reach $1.3B.

Total WDM market will grow from $1.6B in 1999 to $8.2B in 2003. You do the math and tell me how much these estimates have to drop to justify discounting JDSU any more than the market already has. They are the giant and with the SDLI merger without a close second.

I'm not saying to buy the stock here. The market is far too crazy to invest based on company fundamentals alone. Right now the bulls and bears are in a tug-of-war and few are willing to place heavy bets on either side. I'm nibbling but leaving lots of room to add lower should the bears win this round.

If I were investing simply on fundamentals, I'd back up the truck.

Alas. . .

Pat
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