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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Patzack who wrote (15854)	4/11/2001 5:56:53 PM
From: ALTERN8	Read Replies (2) \| Respond to of 37746

any gap up tomorrow will be met with selling, more so than today.

To: Patzack who wrote (15854)	4/11/2001 7:46:56 PM
From: dan36	Read Replies (1) \| Respond to of 37746

Re: CIEN short? Looks like the bulls want CIEN and JNPR to lead the way in this bear rally...The better to short when they top out :-)....A contrarian view courtesy of stockhouse.com. ----- Networking and Telecommunications Equipment Ciena Technology No Shelter From Slowdown By Warren Shiau (wshiau@stockhouse.com) Tuesday, April 10 Ciena [CIEN] and Juniper Networks [JNPR] are practically the only networking and telecommunications equipment companies that haven't warned yet. But recent downward revisions from their peers don't bode well for either company. Though its stock price is already depressed, Ciena's shares may be susceptible to further slips. Ciena hopes that its technology will protect it from the current downturn, but this could be just a pipedream. Despite sticking to their sales and earnings forecasts, Ciena's and Juniper's shares prices have tumbled. Ciena's stock closed at $45.99 Tuesday and Juniper's at $40.30 -- both far from their 52-week highs. Without a truly breakthrough product, it's illogical to assume that Ciena will be immune. Ciena may have to adjust its sales and earnings forecast downward and/or miss current expectations for its second quarter. Avici Systems [AVCI], Cisco Systems [CSCO], Foundry Networks [FDRY], Lucent Technologies [LU], Nortel Networks [NT], Redback Networks [RBAK], Sycamore, Tellabs and countless others have been affected by a slowdown in demand. Without a truly breakthrough product, it's illogical to assume that Ciena will be immune. The most often cited reason for Ciena being impervious to the networking and telecommunications equipment capital expenditure slowdown is its optical switching technology. The company's CoreDirector switch delivered very strong sales growth last quarter, but it's debatable whether CoreDirector will keep Ciena's sales and earnings growth up. The business press describes CoreDirector as an optical switch that eliminates electronic switching. Investors shouldn't be fooled by this description because CoreDirector is not an all-optical switch -- considered to be the holy grail of fiber optic equipment. If it was, telcos, Internet service providers (ISP) and other customers might have to keep on buying it regardless of economic conditions. What CoreDirector is good at is managing bandwidth and services. In other words, a switch like CoreDirector enhances telco, or ISP efficiency, by allowing them to better manage network capacity. But it's not the only switch that does this sort of thing, and it is not the technological breakthrough that an all-optical switch would be. CoreDirector accounted for about 10% of Ciena's $352 million in sales for its most recent quarter. The company's dense-wave division multiplexing (DWDM) fiber optic equipment remains its biggest seller. But spending on even the best DWDM equipment, as Lucent will attest, is definitely not immune to bad economic conditions. As Ciena is still mainly a DWDM vendor, it's probably in for a hit too. Investors who think Ciena's and Juniper's share prices are close to bottoming out may want to wait before buying into either company. The bottom for both stocks could be lower still. Juniper's earnings release this Thursday and Ciena's next month must be well received for the companies' stock prices to stabilize. Right now, there's just too much uncertainty to call either a bargain.