Alliance Fiber Optic Products AFOP Message Board

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Technology Stocks : Alliance Fiber Optic Products AFOP

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To: 2brasil who started this subject	2/20/2001 1:08:00 PM
From: smallcapmaven	of 15

AFOP Alliance Fiber Optic Products Inc., which makes fiber optic components for communications equipment manufacturers like Avanex Corp. (NasdaqNM:AVNX - news) and JDS Uniphase Corp. (NasdaqNM:JDSU - news) Selling opportunity here guys...Great opportunity to sell today... AFOP We got the bounce that we can sell into...The stock is WAY overvalued at this level IMO...The problems at NT and JDSU will come home to roost here...IMO this stock is worth less that $8...I really think that you will be able to buy the shares less than that...The market for DWDM products will be weaker through 2001 than previously said in the CC IMO...AFOP had their CC before the #### really hit the fan so IMO their estimates will be a little too high...Even if they are not high the stock is not worth more than $11 based on future revenue projections...IMO we will see a 50% haircut in a month to 2 months in this stock...At this level the stock trades above 2001 revenue projections by a factor of 10...IMO the forward earnings estimates of $0.07 for 2001 are too optimistic given the recent warnings from bigger suppliers...OPIS products (connectors) that were 85% of the earnings are not expected to be the ‘growth’ engine...The growth ‘engine’ is expected to be DWDM products, CIEN is a new customer...Since there is no 1 customer that accounts for 10% of sales the stock has held up relatively well even up 14% today while their brethren are down...After the earnings PIPR had a but with a target price of $13... cnet.com Keep in mind all of these estimates were before the warnings by CSCO and NT...This is an excellent selling opportunity IMO...The 2nd half of 2001 was supposed to be the real surge in the revenue, but even if it was as great as the estimate you are looking at a company that is selling 10X forward 2001 revenue with a forward p/e of 146!!! Inventory returns were 3.3M for the last Q... OPIS side was weaker than DWDDM in 4th Q 2000 so the growth is expected DWDM...Look at the action in the DWDM field in the last week and you can see the downside...CIEN is the new customer that is expected to fuel growth but that stock is down huge after earnings due to the NT outlook...Back in February 2 when the CC happened AFOP was expected to get 50% sequencial growth from the $8.8M in 4th Q 2000...The OPIS products were not to be growth but rather DWDM, given the recent news there is some question if that is possible...DWDM revenue accounted for only 15% for 2000 and was expected to grow to 30% for 2001, Customers are JDSU, CIEN, ALA...etc. Given the rich valuation and the revenue expextation of only $47M for all of 2001 and earnings of only $2.6M and eps $0.07 this stock is trading at a very rich valuation given the market conditions...OPIS revenue was already flat for the 4th Q so the focus and growth is DWDM... Look at NT, JDSU, ADCT, OPLK, NUFO, and EXFO...They are all down huge...AFOP can't remain this strong long IMO... Compare the forward earnings with CIEN (trading at $79 with 2001 earnings of $0.70...CIEN is a far stronger co IMO and the stock still trades with a forward p/e of 27....AFOP is likely to be an OUCH soon IMO... fortunecity.com

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