To: sam who wrote (14541 ) 12/1/2000 1:12:29 PM From: SJS Read Replies (1) | Respond to JDS Uniphase (JDSU) 56 9/16 +6 1/2: After living through a nightmarish three months, in which shareholders saw the value of their JDSU stock plunge by 60%, the temptation to rejoice over today's strong rebound is understandably tempered by skepticism over the sustainability of the advance... While Briefing.com can't say for sure that the stock won't suffer through another bout of selling in the weeks to come, what we are sure of is that the stock's valuations are much more attractive today than they were a few months back... Given the decelerating economy, and the slowdown in capex spending within the telecom industry, multiple compression among the high-flying tech stocks was bound to occur... What was surprising and a bit alarming was the speed in which it happened... But the good news for those that weathered the storm, and especially for those with the foresight to be sitting in cash, is that the worst is over... Valuations are now rather reasonable, especially considering that, unlike others in its industry, JDSU has offered no evidence of a demand slowdown... To the contrary, at a recent tech conference, management was upbeat regarding conditions. The CEO noted that Q201 is tracking modestly above its $930 mln top-line and $0.20 bottom-line expectations... Also noted that company has solid visibility into Q301 and that he was optimistic about its FY01 guidance of 115-120% yoy sales growth... If the company can deliver on its promise of such strong growth, than it is a bargain at 69x estimated FY01 earnings of $0.82 and 51x projected FY02 results of $1.10... The long-term growth rate is projected at 40%... Typically, that kind of growth is rewarded with a PEG multiple of at least 2.5x, if not 3.0x... With market conditions being what they are, Briefing.com will use the more conservative 2.5x growth figure to come up with our intermediate-term price target of 86... As it turns out this area also happens to represent about a 50% retracement of the 9/1/00 to 11/30/00 decline... Meanwhile, the 50-day moving average is a little lower at 81... -- Robert Walberg, Briefing.com
