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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Hank Stamper who wrote (696)	8/1/1999 2:56:00 AM
From: jmanvegas	Respond to of 24042

If you believe that the close on 7/30 is the top, then you have a very short-term view of JDSU. If you think the 90 3/8 closing price is the high and that we will never see that price again or trade above it is a little far fetched, but if you believe that then I think you should sell out your position or reverse and go short. JDSU will at least double or triple from here over the next 2-3 years, therefore, IMHO, this stock is dirt cheap from a valuation and growth point of view. To each his own - good luck to you. jmanvegas

To: Hank Stamper who wrote (696)	8/1/1999 9:05:00 AM
From: Kent Rattey	Read Replies (3) \| Respond to of 24042

Telecommunications doesn't appear to be one of your strong suits. You must think QCOM is really off the valuation charts. The banks and drugs stocks are cheap right now. The bottom line here at the company I work for, is that we can't light our backbone fiber fast enough. Kent

To: Hank Stamper who wrote (696)	8/1/1999 10:32:00 AM
From: Labrador	Read Replies (1) \| Respond to of 24042

>>Um..., look at Dell over the last several years. It was a rocket. It still earns gobbs of money and is the leader. I recall corresponding with a guy last fall when Dell fell off. They guy said, the company is such a gorilla and has an unbeatable business model purchasing the stock on a 20% pull back--even though it was still way over valued--was a sure thing. He got creamed because every time it dropped, he bought more because it is the gorilla, has a lock on the perfect business model, and because the stock was so hot. There is no way to prevent a flight away from speculation and toward fundamentals in JDSU. If that happens, this stock too will get creamed for those who purchase at these levels. Lets face it. This is a "hot stock." << you obviously don't know what a gorilla is. why don't you read the Gorilla Game, before using terminology incorrectly? It will give you a different perspective and you may then see why many people are high on JDSU. I mean this in a positive way, not as a slam.

To: Hank Stamper who wrote (696)	8/1/1999 2:19:00 PM
From: pat mudge	Read Replies (2) \| Respond to of 24042

Apt metaphor. Icarus forgot who he was and his hubris did him in. Or at least that's how I remember the tale. In the case of fiber optics stocks, it's the investor --- or should I say momentum player --- who forgets there are other gods besides logic. Yes, the sector will continue to grow but that doesn't meant the stock's price will go up in a straight line. Anyone who followed QCOM between '96 and '98 knows exactly what I mean. Having said all this, I have to admit JDSU and SDLI are two stocks I don't want to be out of completely. As for the competition between them, it's not really apples-to-apples as the former is so much larger than the latter. The pro forma met earnings for each company's most recent quarter are as follows (taking JDS and UNPH separately): SDLI --- $5.9 million or $0.18, for a 380% gain y/y. JDS --- $22.9 million or $0.29, for a 144% gain y/y. UNPH -- $18.8 million or $0.43, for a 67% gain y/y. Factoring in acquisitions, SDLI earned $0.10 and UNPH lost $4.80. It's important to note the undersea market is not easy to penetrate because of the rigid tests involved to qualify each product. Once a company passes, they become entrenched. SDL's long history in satellite technology has given them an edge as standards are similar. Based on SDL's recent conference call, it's clear the 10 gig modulator market is the next to watch. They're predicting some build-up in Q3 and major ramp in Q4 and beyond. I continue to believe both companies will succeed. With every country in the world set to upgrade its fiber optic networks, there's more than enough work to go around. And if anyone's worried about SDL's size, all he or she needs to do is consider their vendors --- Alcatel, Lucent, and Corning --- find it no problem at all. I figure the worst that could happen is that they'd be taken out. Going back to your post, I agree it's important to separate the companies from the stocks when determining an entry point. Even gorillas get haircuts when the market corrects. Long term optimistic, short term cautious. Pat

To: Hank Stamper who wrote (696)	8/2/1999 10:31:00 AM
From: DownSouth	Read Replies (1) \| Respond to of 24042

David, thanks for your bearish opinion. We need to study those opinions. Students of Gorilla Investing know that Dell is not a Gorilla--never was. It is a King. I shares the market with other Kings. It has no real barriers to entry. It is not a rule maker. Its fall was no surprise who understand the difference between Kings and Gorillas. Same goes for CPQ. The question is, is JDSU poised for true Gorilla-dom or is it just a King. Does it own proprietary technology? Does it make the rules?

To: Hank Stamper who wrote (696)	8/2/1999 10:34:00 AM
From: Trader Dave	Read Replies (3) \| Respond to of 24042

There are some rational posters on this thread, and I have to agree a little with lots of thinking and disagree a little with a lot. Is it way overvalued? Maybe, but comparing a company in a position like JDSU to Dell or Amazon or Aol is not valid. Is it possible the stock gets cut in half in a bad market? Or even worse? Sure it is. But I haven't met a SINGLE market timer capable of calling the top AND the bottom. There are reasons why the greatest investors of all time did very little trading. But let's discuss valuation. JDSU is extremely expensive on a forward PE basis. For now, for argument's sake, let's assume JDSU earns $1.30 in CY 2000. At $90 that's roughly 70 times forward. Wow!!! Spendy! But saying JDSU is expensive and comparing it to Dell, Amazon or AOL is downright silly. The PC market is a maturing business. Dell may be taking share and is a great manufacturer, but they aren't the dominant merchant supplier in a market that has enormous growth with significant intellectual property content. The PC business may grow at 15% compounded over the next 5 years....may. Amazon isn't even worth discussing, commodity retailer, no control over product, end of story. AOL is tougher, but it clearly has some internut valuations, but it is a repeat revenue story, but won't grow in proportion to digital communications traffic. The potential growth in data communications traffic over the next 10 to 15 years is mind boggling. There is no way to tell who the winners will be in the consumer Internet business, but it is pretty easy to project the potential for the data communications business. The data infrastructure market is currently around $60 billion per year. The analog telecom infrastructure market is around $800 billion per year. I don't know exactly how big the cable infrastructure business is currently, but it is large as well. The data communications market will swallow all analog infrastructure businesses and grow in proportion to Internet usage. Over ten years it's probably a 30 bagger opportunity. JDSU is in a unique position in the market. Do you know how many fiber component startups there are? Do you know why there aren't any? In addition, when owning JDSU, you must evaluate the opportunity presented by creating integration between Uniphase's active components and JDS's passive components. The integrated subsystems will generate more revenue per channel at higher margins yet be a lower cost faster time to market solution for their customers. Win, win, win. And these potential products aren't in the estimates yet. Now, size the market for long haul fiber, Uniphase is still in the early stages there. Probably enough to sustain 40% to 60% growth for at least 3 to 5 years. The metropolitan area? The connection density grows enormously, I'd bet that market is at least an order of magnitude larger. Don't even bother to try to quantify the local loop, but also a magnitude multiplier larger than metropolitan. In my opinion, anyone buying this thing that has no capability of handling this stock at $40 shouldn't be in it. But to anyone calling the top at $90, you may look really smart right now, and like a genius in the fall. But can you call the bottom? Can you be positive there will be a massive correction? Who knows? The only thing I'm pretty sure about is that anyone selling out now has a good chance of regretting it in two years. Anyone buying now and viewing it as a sure thing is foolish too. JDSU and a few others remind me of Cisco and Intel from several years ago. They were good long haul bets, but there has been plenty of volatility along the way. TD