[B] New Focus shares trade higher on rumors, value-hunting
By Blue Derkin, BridgeNews
New York, March 14 (BridgeNews) - Shares of fiber-optic component maker New
Focus Inc. popped up in a tough market Wednesday amid some takeover talk,
although one analyst said it was just a case of investors are finding value in
a beaten-up sector.
* * *
The San Jose-based company's shares, along with much of its sector, fell on
hard times in the past month. The stock fell from over 40 a month ago to 13 3/4
at the end of Monday's session; it's since bounced back to as high as 18 1/4
Wednesday, up about 24% from its Tuesday close.
Unsubstantiated rumors of a possible takeover by the likes of JDS Uniphase
might have fueled the stock's climb on Wednesday. The Canadian company's
open-ended statement Tuesday that it doesn't plan to slow its acquisition pace
led investors to speculate on which companies JDS Uniphase might consider
attractive; according to one analyst, New Focus falls squarely into this
category, although he doubts the company would be willing to sell out.
Neither New Focus nor JDS Uniphase returned phone calls.
James Jungjohann, who covers New Focus for CIBC World Markets, said: "New
Focus is a quality name in its space, which has been performing disastrously
lately. Lots of investors are finding attractive buys at the bottom of the
sector."
But Jungjohann didn't see an acquisition by JDS Uniphase or anyone else.
"When you have a sector that's been beaten up as much as fiber optic components
has, talk of acquisitions swirls around. Companies, however, don't want to sell
out at its bottom, especially when a company is as solid as New Focus."
Other stocks in the sector languished with the broader market. Shares of ADC
traded Wednesday near its year lows, as did Oplink and Luminent, which are New
Focus's main competitors in the high-speed fiber optics industry. |
