ONIS thinks bottom is hit! With this news I cut my ONIS share in half.
qs, I started investing as a pure value oriented fundamentalist in 1992/93. But I came to notice that I floundered while techs made all the gains. When I decided to buy tech, I went after those with the best fundamentals. Again, my selections floundered while the niche leaders (whose PE's and BV's always seemed to be out of reach) skyrocketed. I only started beating the market when I crossed over to the dark side, buying the leaders, keeping an eye on the fundamental arguement, but not becoming a slave to it.
Playing the CIEN's, SEBL's and ONIS's have been profitable for me over the past 3-4 years. Knowing when to bail is the key. You can short CIEN here, but I don't think technicals support such as move right now.
That said, I'm beating the market this year, however I'm not in the black YTD, with the exception of my wife's 401K.
I'm up nearly 50% since Oct 1, but not quite in the black. I remember KB or somebody saying that a 33% drop in portfolio value requires a 50% increase to get back to breakeven. I'm finding out first hand how true that is.
BALTIMORE (CBS.MW) -- The chief executive of ONI Systems asserted on Monday that ONI
will survive the economic downturn and emerge as a "leader" in the market for equipment
to bring high-speed networking to dense urban areas.
"I challenge anyone: we will be a
survivor," said CEO Hugh Martin at
Deutsche Banc Alex. Brown's annual
technology conference in Baltimore.
"We will be a leader."
Like other telecommunications
equipment makers, ONI Systems
(ONIS: news, chart, profile) has endured
falling sales and bigger losses amid a
sharp cutback in spending by phone
and data carriers. Yet CEO Hugh Martin
said conversations with customers has
persuaded him that declines in capital
spending have hit "bottom."
Sales should start to pick up next year,
especially in the so-called metro
market, Martin said. ONI produces
optical gear that enables carriers to offer
advanced data services in crowded
cities. Many buildings, particularly
smaller ones, lack the full ability to tap
into high-speed networks.
Martin said phone carriers will spend
more on metro equipment and far less
on "long-haul" gear used to speed up
the flow of information over long-distance
networks. During the boom years of
1998-2000, carriers spent the bulk of
their money on long-haul products.
Looking to the fourth quarter, Martin
reiterated previous forecasts. ONI
expects to achieve sales of $40 million
to $50 million - revenue totaled $40.2
million in the third quarter -- and post a
loss of 16 cents to 20 cents a share.
Recent initiatives to save money, which included a workforce reduction, should enable the company
to fund its operations out of its own cash reserves for the next four years if necessary, Martin said.
He also said the company is holding active discussions with 147 potential customers. ONI has
publicly announced 27 customers.
The ONI CEO said the driving force in optical sales will be the Baby Bells, most of which are starting
to test a variety of metro products. He did not specify when they would start making mass
purchases, though most industry analysts believe that it could take several years or more. The Bells
tend to move cautiously.
One quasi-Bell company, Qwest Communications (Q: news, chart, profile), already is a large
customer of ONI Systems, Martin noted. Qwest bought US West last year and offers local phone
service in 14 Western states.
Martin said the two rivals he fears most are Ciena (CIEN: news, chart, profile)] and Nortel Networks
(NT: news, chart, profile).
He argued that Nortel lags behind and has been distracted by internal turmoil related to the Canadian
vendor's massive restructuring. Ciena poses more of a threat, he said.
ONI shares ended the day up 84 cents, or 13 percent, to $7.50. |
