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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: JRH who wrote (583)	2/28/1999 8:43:00 PM
From: mariner	Read Replies (2) \| Respond to of 54805

Thread Have been lurking since Uncle Frank stood up the thread a few weeks back. Am an infrequent poster overall in any event. I haven't read the thread manual yet, but its on my list for summer reading. That said, I think I have some idea of the Gorilla concept having studied the debate here. As far as JDS/UNPH goes, I think this will be a terrific combination. I've been long JDS for some time. It's been growing at a 70% or better rate. While I'm no tech guru, I understand JDS' forte is the "passive" side of the optical business. UNPH is not growing as quickly as JDS (about 40%) but is complementary in that it's strength is primarily "active" components. Together, they complement each other very well. Little product overlap. Merger of equals was apparently driven by customer desire for "one vendor solutions" which this firm will provide. Competition is from ETEK and SDL Optics and perhaps a few others I'm not aware of. These are very good companies, but I believe the JDS/UNPH merger will enable the combined firm to really lead this market. Growth within the optical market remains outstanding, and given the apparently unquenchable demand for bandwidth, should remain exceptionally strong for the next few years. While I'm not expert on UNPH, JDS balance sheet is very strong. I believe together that this combination will lead to a possibly dominant firm in this market, although the potential for "culture clashes" always exists. Highly recommended for inclusion in the Watch and Wait portfolio. PS: Have been very impressed with this thread. Am a refugee from the CSCO bunfight (as a lurker). Hopefully this one can remain above the fray and continue to be an interesting discussion.

To: JRH who wrote (583)	2/28/1999 9:02:00 PM
From: Chadick	Read Replies (2) \| Respond to of 54805

Uniphase in quarter ending 9/30/98: Rev. 54.2 $MM, Net income 9.7 $MM, # of shares 41.3 MM, price/sales 16.8, MktCp 3639.0 $MM Two main competitors E-Tek(ETEK), SDL Inc(SDLI) 1998 sales UNPH $175.8MM, ETEK $106.9MM, SDLI $106.1MM The industry is photonics, and refers to the process of harnessing light for optoelectronics applications. Telecom needs it to increase speed, increase bandwidth.The industry operates in 3 segments, systems, modules and components. Systems providers include Lucent, Ciena, Nortel and Alcatel. Module manufacturers include Corning, Lucent,and an in-house division of Nortel. Components are manufactured by Uniphase, E-Tek and SDL. JDS makes passive components, Uniphase active components; they do not compete,they compliment each other. After merger their components will be assembled into modules and sold to the system providers at a higher margin for UNPH and a time and cost savings for their customers. per IBD, Uniphase has been agressive in acquisitions, their strategy is to move up the food chain and they have been very good at integrating past acquisitions. IMO they bear watching. Fred