It is hard to expect an uptick in capital expenditures until telecom fundamentals change.
On the plus side, data traffic continues to grow at a steady clip, suggesting that sooner or later capital spending will have to pick up or data networks will become so clogged as to be useless.
On the negative side, so many of the telecom providers are in such bad shape financially that they don't have access to capital markets and thus can't spend money. The sickest of these are going bankrupt.
In time, pricing power for network capacity will improve, and as the sickest players go through restructuring or BK and emerge with better balance sheets, capital spending will increase.
I think we have a few more tough quarters ahead, followed by a turnaround. WS looks only a quarter or two ahead, so I don't expect a turnaround in stock prices until perhaps late this year. Meanwhile, LU, NT, JDSU, GLW, AGR.A/B and a few others represent outstanding value for patient long term investors.
Just my two cents. |
