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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: jad who wrote (22055)	1/7/2002 10:21:29 AM
From: Glenn McDougall	Read Replies (2) \| Respond to of 24042

From CIBC world markets... Looks like that 26.9 million block could be sold. Regards, Glenn Optical Components - 2002 Extended Forecast Optical component stocks experienced a horrifying 2001 with our CIBC Optical Component Index down 71%. Our index has salvaged a very robust 51% gain from its low back on September 24th ,versus the 17% gain in the S&P 500 and the 37% gain in the NASDAQ. In the near-term, much of the good news may already be priced into the stocks including Fed rate cuts, restructuring, an expected 1H02 inventory "pop", and investors finally thinking we have found the fundamental "bottom". Current valuations are not even supported by optimistic 2003 earnings. Somewhat encouraging, on a multiple of revenue our group trades at 9.2 times CY02 revenues versus 11.7 times for the communication ICs group. Our fundamental outlook for 2002 should be unpalatable for most investors, but positive momentum could build in the second half as more favorable perceptions toward trough earnings in 2003 materialize. On average, we are looking for optical component revenues to decrease 41% in 2002 from 2001, which we hope is too conservative. However, modest sequential revenue gains for the industry could begin as soon as 2Q after most inventories are finally worked down. We would continue to underweight the sector, but recommend investors have some exposure to the group as fundamentals get less worse (second derivative game). For patient investors, we recently turned more bullish on telecom component vendors such as JDS Uniphase (Sept 24th report, Upgrading to Buy from Hold and Agere (September 21th report, "Initiating with a Buy") On a relative basis, we kept our buy ratings on short-haul and datacom vendors such as Finisar and Stratos Lightwave throughout 2001 and into 2002. We have a buy rating on test and measurement provider EXFO, while we currently recommend Holding the shares of New Focus and Oplink. However, our closely followed optics companies are not Cimmerians who dwell in a land, Homer described, of perpetual darkness and gloom! Sunny days are ahead and long-term, over the course of the next several years, we remain optimistic. Our suggested strategy is to "hunt and peck" our way through 2002 with select stocks, meaning investors should be prepared to trade the group.