Ciena (CIEN) Message Board

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Technology Stocks : Ciena (CIEN)

CIEN 188.78

+1.0%

Nov 19 4:00 PM EST

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To: craig crawford who wrote (523)	7/16/1997 5:36:00 PM
From: Sam Citron	of 12623

Craig, What would you think of long LU and NT; short CIEN? This strategy is based mainly on PSRs. I have nothing against CIEN and respect the execution of their strategy for WDM system sales. It's just that I don't like buying stocks that are more than 10x sales. That is why I cannot buy UNPH or TLAB either at today's prices, both excellent companies. When a company sells at a multiple of 30 x sales, which is where CIEN is today, I believe that is simply unsustainable. Of course, they could "grow" out of it to a more potentially sustainable PSR of 10. LU and NT both sell at much more reasonable PSR of 2 or less, so I feel much more comfortable with these companies. I am risk averse, or else I would not even consider shorting a WDM stock in this bull market. Some might find that strange, but it is a small partial hedge on a long tech portfolio. SC

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