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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (2955)	10/12/2000 9:52:00 AM
From: pat mudge	Read Replies (2) \| Respond to of 3951

And the alleged lack of volume-manufacturing experience at BKHM that SSB cites as an "execution risk" is in fact a strength of JDSU/SDLI. True. I'm just feeling extra sensitive about analysts veracity --- or lack thereof --- this morning. The time I discovered Alex Brown was not only selling but shorting a stock it had just issued a buy-rating on just before it announced a lost contract was a turning point in my Wall Street education. Educating Rita, indeed. :) [OT will see Dancer in the Dark with Linds tomorrow.] Pat

To: Wyätt Gwyön who wrote (2955)	10/13/2000 3:44:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 3951

Today's Middle East-related market drop was like a kick in the stomach. While waiting for some reprieve, I've found a couple reports with quotes that provide a ray of hope: First from Deutsche Banc Alex Brown: Our view is that optics-related capex will continue to be robust in 2001, as we believe that carriers will continue to spend on technologies that should have rapid revenue generation capabilities. Carriers are increasingly trying to adjust their business models to the high-growth segment of the telecom services market, i.e., data/bandwidth services. With both local and long distance service revenues (voice based) growing at anemic single-digit rates and the old world model of charging for the pipeline (T1 or T3 lines) is rapidly eroding; service providers have to offer wavelength services. Industry estimates suggest that DS 3 and OC 3 circuits will grow annually 106% and 221%, respectively, from 1999 to 2002. When demand grows at such an explosive rate, provisioning becomes a critical issue, in our opinion. Optical networking technologies including DWDM, Optical Switches, and Optical Cross-Connects can reduce the provisioning time from months to weeks. Dynamic provisioning, using optical equipment with software-based Network Management Systems can dramatically reduce provisioning, thereby enabling the service providers to offer services to their customers at a rapid rate. Hence our belief that, despite the current concerns about carriers’ capex, the optics sector should remain strong in 2001. Our view is that optics players will end 2000 strong and the outlook will remain strong as the long-awaited Metro market begins to ramp up. And from Cowen on JDSU, dated 10/11/00: SG COWEN JDS Uniphase: (JDSU: $93-1/2) John Butler/Geoffrey Hansen 10/11/00 Rating: Strong Buy Price Target: $135 Initiating Coverage with a Strong Buy rating ============================================================================== ============================================================================== Key Points: 1. As the leader in the optical components and modules sector, we recommend JDSU as a core holding. 2. The company has the broadest product portfolio in the sector and a blue-chip customer base. 3. JDSU’s manufacturing capacity is the largest in the optical component industry. 4. We view JDSU’s merger with SDL positively; it should significantly broaden JDSU’s product line. 5. JDSU has a very experienced management team with good vision and a strong track record for execution. Investment Thesis: We view JDSU as a phenomenal story and recommend it as a core holding in the optical networking sector. We would liken the company’s opportunity to that of Intel’s or Cisco’s opportunity years ago when these companies first grew to dominant their respective markets. In our view, JDSU has all of the qualities of a core holding, including a very strong long-term market opportunity, a leading position in the market, a blue-chip customer base and a superior management team. Moreover, JDSU is now in a position to acquire any product line or technology it doesn’t already own. As a result, we expect the company to maintain its dominant position in this market despite the specter of growing competition. Based on this thinking, we rate the shares of JDSU Strong Buy a 12-month target of $135. In the wake of a series of acquisitions, JDSU now stands as the most dominant player in the optical components sector. JDS Uniphase is by far the largest player in the merchant market for optical components and modules. The company firmly established a lead in this market in June of 1999, when Uniphase, a leading manufacturer of active components, merged with JDS FITEL, a leading manufacturer of passive components. It was a true merger of equals and the subsequent integration of the two organizations went so smoothly that JDSU has since gone on to complete four more major acquisitions. These include OCLI, Sifam, Epitaxx, and E-TEK. JDSU is also in the process of acquiring SDL Inc. in a deal that is expected to close by the end of the year. We are very positive on this merger, as it should serve to significantly broaden JDSU’s product line. In the wake of all of these acquisitions, JDSU now boasts the broadest product portfolio in the sector. Its major active components include source lasers, pump lasers for optical amplifiers as well as modulators and receivers. In terms of passive components, JDSU is a leading manufacturer of DWDMs, attenuators, optical switches, couplers and circulators to name just a few. The demand for all of these components has sky-rocketed over the past couple of years as telecom carriers and cable operators work to scale up the capacity of their networks with optical networking gear. As the most dominant player in the optical components sector, JDSU is perhaps the most well positioned company to benefit from this exploding demand for components. And, finally, from Wireline Weekly, dated 10/11/00: Commentary: Structural Change and Application Innovation in Telecom Services is Key to the Equipment Suppliers…We believe Juniper Network’s Earnings Release (10/12 after the close) could Emerge as a Catalyst to Alleviate Fears regarding End Demand Trends One of the most frequent questions we have received following the recent publi-cation of our initial 2001 wireline capital spending survey is how can capital spending on communications equipment continue to grow at a robust pace while telecom services companies register decreasing (if not negative) cash flows from operations and declining stock prices. We would argue that it is crucial and rational for telecom services companies to invest aggressively in next generation telecom infrastructure to improve their respective strategic positions and in the process enable a whole host of high value revenue generating applications. Structural Change in Services Market Creates the Need to Invest in Next Generation Infrastructure There have been three fundamental developments during the last five to six years that have created an environment of increasingly rapid change and a growing intensity of competition in telecom services. The three factors include the Tele-communications Act of 1996, the emergence of the Internet and an acceleration in the rate of technology innovation in communications that promises to create a growing array of applications. These events or inflection points in telecom services necessitate dramatic increases in capital spending on next generation telecom equipment that show no signs of abating. . . .