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

To: gdichaz who wrote (763)	8/11/1999 7:30:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 24042

Tech stocks may be in trouble, analysts warn Thomas Hirschmann Financial Post Analysts have raised warning flags about the short-term outlook for technology stocks, with the threat of higher interest rates pushing the Nasdaq composite index down 10% in three weeks. But they remain optimistic about some sectors' longer-term prospects, singling out the potential of fibre-optics manufacturer JDS Uniphase Corp. "While there has been much carnage, we feel that there is more to come," said Levesque Beaubien Geoffrion Inc. in a report written by quantitative strategist Martin Roberge. He said tech stocks normally have a downside of 15% to 20% and there is still much downside left "considering the still-overbought conditions." Levesque examined market multiples and concluded it would recommend investors stay out of the sector until the fourth quarter -- a seasonally strong period for techs. Analysts at Salomon Smith Barney Inc. warned in the newsletter Equity Strategy that companies may borrow from the first quarter of fiscal 2000 to meet fourth-quarter targets, which could make the beginning of 2000 "difficult." Relatively full valuations may discount much of the upside, leaving more risk on the downside. Salomon Smith Barney said, however, that certain stocks offer value with strong long-term demand and relatively low valuations. It was particularly keen on the communications segment, highlighting JDS as a company projected to grow at a 50% annual rate for the next five years. Analyst Liisa Bogarty compared JDS with Cisco Systems Inc., which trades at a similar multiple. Given that JDS is predicted to grow at twice the rate of Cisco in the next five years, "the upside potential appears greater for JDS."

To: gdichaz who wrote (763)	8/11/1999 12:19:00 PM
From: quidditch	Respond to of 24042

Agree with you, gdichaz. I have been long JDS.TO and UNPH and am now happily long JDSU (though absolutely miserable about the tax treatment of US holders of JDS.TO in connection with the merger--have to pay gains). The story seems universally positive concerning JDSU, most importantly, the apparently accelerating move to metro deployment of fiber and possibly electro-optical fiber switching in the metro sphere. One caution to think about (and I certainly don't want to dissuade SM from joining the club), just so we're not blindsided: I thought that I had read somewhere that a private company, named Foveon (?), was fairly well advanced in the development of a pure optical switching system that would neutralize the latency implicit in current pure optical switching technology. Maybe Exciton has a take on this? Best to all. Steve