Hi Ed! This is one person's opinion I saw on Yahoo.....
Re: JDSU 101 - Lets do some homework.
by: olecasocks 07/05/02 06:51 pm
Msg: 492647 of 492677
JDS Uniphase dominates the fiber optics components market. From Uniphase, they have the largest share in active components like lasers. From JDS they have the largest share in passive components like receivers. These components go into optical communications systems that run over the fiber network.
This has been a weak market in the slowdown. The long distance backbone systems across the U.S. and the oceans is in place. There is enough capacity to handle current levels of traffic, but Internet traffic is still growing 300% a year, so more will be needed. A lot of the fiber that was installed is “dark,” and to light it up requires optical systems using JDSU components.
In addition, there isn’t nearly enough fiber in the “metro” market—the fiber rings built around major cities to collect and distribute data and voice traffic. Only about 5% of the 750,000 office buildings in the U.S. have a direct fiber connection to the Internet. That’s pathetic. Europe is further behind, and the rest of the world is essentially nowhere. And while your cable TV company may use fiber from their antennas to each block of 5,000 to 10,000 homes, it will take 10 years to get all those houses directly connected to an optical network.
But it will happen, and JDSU will supply the components. There were dozens if not hundreds of venture capital-backed startups targeting JDSU when the bubble burst, and virtually all those erstwhile competitors are out of capital. JDSU can cherry-pick the technologies, patents and people it wants to continue its dominance.
In this slow market, JDSU has been rightsizing itself through layoffs, plant closures and other measures. When the market recovers, sales will grow rapidly and profits will improve even faster. That won’t happen immediately—some of us won’t get all of our money back—but over the next few years this stock has a long way to go, and there aren’t many other stocks set to give us the same kind of returns going forward. Buy JDSU up to $5 and expect a dramatic run-up over the next few years as the optical networking market resumes rapid growth. There is no cheaper way to move bits of data or voice any significant distance than over optical fiber. |
