I have been lurking on this thread as well as that of other companies of some interest for some time and I would like to add my two cents to the debate at this time.
First off, I would take anything I read in a newspaper or newsletter as it pertains to any company with a chunk of salt. It's always the same scenario---a money manager or analyst tells you what his or her favorite stocks are, hoping that people will buy these and get a pop for their stocks. But if you notice, the recommended stocks are almost always trading at or near their 52 week highs. This cheap manipulative tactic might have worked 5 or 10 years ago, but most investors have grown wise to this and ignore these promotions, although a few naive souls are still getting pinched in this trap.
As far as JDS is concerned, this stock was a favourite of the in crowd last year and the stock soared. The early birds (also known in some circles as "smart money") made a killing, but most have since moved
on. Anyone who cared to look at their recent earnings report understands that the game; as it is, is almost over, as revenue and earnings growth has slowed and the huge premium is about to do likewise.
Yes folks, the momemtum game, once solely the preserve of American investors has come north with all its attendant characteristics of boom and bust.
It's not only JDS. The same has happened to many other tech stocks in Canada such as Leitch, Mosaid and currently JDS and Newbridge. It was obvious months ago that a stock like JDS was grossly overpriced and splitting the stock is not going to stanch the decline. The one stock that might recover from this bloodbath is Newbridge, which is a world-class company going through a temporary period of difficulty. For the others it will be a tough road back.
Only one person's opinion. |
