Glenn
Agree with your assessment of another great quarter. JDS continues to perform exceedingly well. I can't help but wonder what would happen if this was NAZ listed.
I believe we can raise our 6 month price target (assuming the market doesn't melt down) to $60 Cdn.
Rationale: (using "big" numbers)
Current growth rate is approx 75%, which admittedly is down from the 100% range of the past, but still great. Let's assume a 50% rate going forward, which may be conservative for the next year, assuming the internet and telecom industries continue to expand as expected. Based upon current year eps of .22 and .27, we can extrapolate ahead to .32 and .37 for the next 2 quarters (assuming a linear, non-seasonal progression, which may not be quite valid). This would give us an eps of $1.18/share. Big number, using a PE of 50 gives us a $60 target.
I'm no expert, but given the nature of the market, recent agreements with Signal and Corning, and finally their expanding manufacturing capacity, I think $60 is a reasonable, if aggressive price target for 6 months out. Note that I haven't examined the "limits" to growth particularly closely. There may be some factors which I am unaware of. However I believe the market which JDS serves will continue to explode over the next couple of years as the need for bandwidth becomes such an important driver of the info economy.
All IMO, bricks and bouquets more than welcome. |
