re JDSU:
<<last Q sales estimate I heard was $235M. Annualized that.......>>
Not fair. For AMAT, you don't value them on trough numbers. JDSU, and the entire telecom/equip/component sector, is going through the worst decline they have ever seen.
Also, the relationship between sales and profits is not linear. Massive overcapacity, a capital-intensive business, and the need to continue R&D even if nobody is buying, makes their situation much like AMAT's at cycle troughs. The severety (I can't spell it, I'm too old to learn, you'll just have to forgive me my offenses).......uhh, as I was saying, the sevirity of current conditions, and the fact that nobody is making profits, means current conditions can't last.
If you wait till telecom stocks stop getting delisted, and JDSU's revenues have started going up, you'll buy their stock at 2 or 3 times where they trough. The low point for JDSU, will be when the light at the end of the tunnel is so small, you're not sure you're seeing it. Of course, maybe you aren't. I guess I just require less certainty than you, about the timing of an upturn. |
