I've been surprised that telecom has come back so well and so soon. If you asked me 2 years ago if telecom would recover before semi equipment - I'd have said NO WAY Telco is dead.
Nice post.
Think about it a moment.
We had enough dark fiber in the ground to last through perhaps 2006 at the expected growth rates according to estimates I read in 2001.
This is very cheap bandwith that can be had for the cost of access. How do you access it? Cell phones were the obvious answer. I dug a bit deeper and bought "Carrier access" which was one of the few companies providing cheap access to the internet while operating as a viable business model. I bought their stock and made a good deal of money.
Agilent and the chip companies that make chips for the cell phone markets have done well since the market bottomed in 2002. I think I added to my Agilent shares as low as $11
stockcharts.com[h,a]dhclyymy[d20010601,20041231][pc20,50!d20,2!f][pc20!c50!i!d20,2!b100!b200!f][vc60][iut!Uo14!La12,26,9!Lh14,3!Lc20]
To me, that chart looks like a massive inverted head and shoulders pattern with a necklinne around $38. From the larger chart, it seems $50 to $60 could be a possible target should it even regain favor
stockcharts.com[h,a]dhclyymy[d19990601,20041231][pc20,50!d20,2!f][pc20!c50!i!d20,2!b100!b200!f][vc60][iut!Uo14!La12,26,9!Lh14,3!Lc20]
especially if they can keep growing earnings to something above $2 a share in a couple of years.
Agilent also sells testers. That market was dead from used equipment flooding the market after the bubble burst. We are still down 200,000 jobs from the peak here in the Silicon Valley. That was a huge supply of 'scopes and other test equipment that the "Old HP" used to sell which is now Agilent. It was only a quarter or two ago when the CEO said he felt the grey market had finally absorbed all the used gear.
Did you listen to the conf call? They have a ton of cash they are going to sit on until they see clear signs the economy has turned up. Maybe they'll pay a dividend like they did when they were HP. I know from people who have gone there to work recently that stock options are not given out like candy as is the case at many other companies they compete with. |
