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Technology Stocks : Oclaro, Inc. (Avanex-Bookham) -- Ignore unavailable to you. Want to Upgrade?

To: Gustaf who wrote (1160)	11/28/2000 2:01:13 PM
From: zx	Respond to of 2293

thanks for your ideas. added to my avnx call positions.

To: Gustaf who wrote (1160)	11/28/2000 2:15:48 PM
From: Shaw	Read Replies (1) \| Respond to of 2293

zx, good of you, to link us back to Gustaf's post, keep our eyes, on the coming earnings prize, is his message, right.

To: Gustaf who wrote (1160)	11/28/2000 3:55:34 PM
From: Krikor	Read Replies (1) \| Respond to of 2293

Gustaf, If Avanex was cheap then, what do you think now? KG

To: Gustaf who wrote (1160)	11/28/2000 4:16:14 PM
From: Thomas Tam	Respond to of 2293

Avanex is cheap Cheap is all relative. For someone that bought at 250, then the current price is cheap. For people that bought at less than $1, then its expensive. Current share price is not a reflection of what the stock will do in the short or long term. Looks like most of the big networkers (CSCO, NT, Fujitsu, Siemens, SCMR, ...) will have their next generation DWDM systems based on Avanex's technology. Agree, but when will deployment occur? Assuming Avanex will get only 1% of telecom capex (as SDL is projecting for next year) = $ 1 Billion, AVNX's PE ( with 50% profit margin ) would be 10, based on today's stock price. Not many companies get 50% profit margins on their entire sales. For QCOM where we think its strictly a IP company, their margins are in the 20% range. If you the profit margin calculation then the PE is 20-25. Next step is one billion dollars in sales, I think current expectations are in $200 million or so this fiscal year and and 350 next, so it will be a few years before we get to one billion dollars in sales. Therefore you may be paying for a company that will have this PE of 20-25 that won't be obtained until 2004-2005. So I would question the cheapness of this stock at present. Don't get me wrong, I like the company, but to say the price is cheap in terms of PE is slightly misleading. Question is what is a reasonable price to get in on this one?