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

To: dday who wrote (1886)	7/8/2001 12:56:24 PM
From: The Ox	Respond to of 2293

Companies that are showing substantial revenue growth rates while increasing margins and gaining market share deserve high price to sales ratios. Your analysis is dead on but the key is where will revenues and margins be in 3 years? AVNX was showing a tremendous growth rate until the downturn but have recently seen their growth stop dead in it's tracks. Actually, they've seen their revenues decline substantially and this was why I was pointing out the PSR. I don't subscribe to the 3 year bear market going forward like many seem to believe is in the cards for this industry. Still, 3 years out is a long time away. Like you mentioned, you had to pull a number out of the air for your illustration. While in a different industry, VTSS had a very high PSR for years because they were able to show a sustained period (over 5 years) of incredible revenue growth (while maintaining or increasing their terrific margins). Until such time in the future when AVNX can give forward guidance that substantiates a higher PSR, I think that it is important to keep a watchful eye on this metric. Thanks for your comments and please keep them coming. Best regards, mh