One issue:
I don't see that any of the bells are big customers of JNPR equipment yet.
In fact, the bells have issues of trying to integrate data into voice networks, and are slow to switch to IP due to QoS issues. The bells seem more inclined to stay with ATM, frame relay, or SONET for optical metro networks. Viz the recent award from ATT to CSCO and (CIEN? I think) for SONET equipment for the metro net expansion.
JNPR makes great IP routers, and I believe the future is IP. Though whether it is IP with MPLS overlay (like the IP routers JNPR fixed up for LVLT's all-IP network... btw, LVLT is unlikely to spend ANY money on capex for the next 12 months, for core routers... )
When I look at the list of JNPR's customers, it is scary. The only ones likely to purchase are Q and WCOM, and those at much reduced levels. In fact, I think Q will halt most non-metro capex, better for them to just lease the long-haul from LVLT etc for now. Many others on the list are in or headed to BK.
I fully agree with you that JNPR is a warrior company, with great products and smart folks working there. But as an investor, however much I like the technology, my investment decisions are based on the business side of the equation. Business is not good for JNPR and will not likely improve for a few Qs to come (and that is the best case, only a few light Qs... might be worse). When the current animal spirits leave the market, and the tide runs back out, unfortunately JNPR stock price is likely to deflate severely. Hence I cannot go long at this time and price.
N.B. I was long within the last month. |
