Ideas tend to breed other ideas - doing my regular and routine due diligence on component and subsystem companies like Finisar (NASDAQ:FNSR), Avago (NASDAQ:AVGO), and JDS Uniphase (NASDAQ:JDSU) has led me to dig deeper into Applied Optoelectronics (NASDAQ:AAOI).
This company looks like an interesting play on the 10G/40G data center
upgrade cycle, as well as fiber to the home, with a strong core
competency in lasers. This is a highly competitive space, though, and I
think readers may do well going into it with the assumption that any
investment relationship is likely not to be of the long-term variety.
Follow this link to the full article:
Applied Optoelectronics Looking To Two Primary Growth Drivers
Showing posts with label JDS Uniphase. Show all posts
Showing posts with label JDS Uniphase. Show all posts
Tuesday, September 16, 2014
Sunday, September 7, 2014
Seeking Alpha: Finisar Taking Its Lumps
Optical components manufacturer Finisar (NASDAQ:FNSR)
has become a miserably bad call for me. Six months ago, I wrote that I
would never want to hold Finisar for the long term and that I thought
the shares were already trading at their inherent DCF-based value (with
some bullish assumptions). I also thought, though, that momentum in the datacom business would support the business
in the near term and lend strength to the shares. With the stock down
more than 20% over the past six months, though, that clearly has not
happened.
Along with fellow component manufacturer JDS Uniphase (NASDAQ:JDSU) and telecom equipment companies like Alcatel Lucent (NYSE:ALU) and Ciena (NYSE:CIEN), Finisar is contending with weaker than expected telecom carrier spending. Finisar is also seeing lumpier datacom spending from Web 2.0 customers and weakening growth in wireless transceivers while pursuing lower-margin sales into the Chinese telecom market.
I didn't see a lot of intrinsic value in the shares six months ago, and I don't see much now either given the company's lower guidance. I can also construct a bearish scenario that would see the company retest the $11-$13 range. Finisar is part of a volatile sector and is heavily shorted, though, and the shares could bounce if business conditions improve and the company delivers beat-and-raise quarters. I do think that Finisar has good technology in 40G/100G transceivers and transponders, as well as opportunities with its wavelength selective switches and ROADM cards, but this is a pretty tough sector for value-oriented buy-and-hold investors like me.
Continue reading here:
Finisar Taking Its Lumps
Along with fellow component manufacturer JDS Uniphase (NASDAQ:JDSU) and telecom equipment companies like Alcatel Lucent (NYSE:ALU) and Ciena (NYSE:CIEN), Finisar is contending with weaker than expected telecom carrier spending. Finisar is also seeing lumpier datacom spending from Web 2.0 customers and weakening growth in wireless transceivers while pursuing lower-margin sales into the Chinese telecom market.
I didn't see a lot of intrinsic value in the shares six months ago, and I don't see much now either given the company's lower guidance. I can also construct a bearish scenario that would see the company retest the $11-$13 range. Finisar is part of a volatile sector and is heavily shorted, though, and the shares could bounce if business conditions improve and the company delivers beat-and-raise quarters. I do think that Finisar has good technology in 40G/100G transceivers and transponders, as well as opportunities with its wavelength selective switches and ROADM cards, but this is a pretty tough sector for value-oriented buy-and-hold investors like me.
Continue reading here:
Finisar Taking Its Lumps
Tuesday, December 18, 2012
Investopedia: Hard-To-Value Finisar Could Be In For Better Days
It can be dangerous to have a good feeling about a company's stock, but
not be able to back it up with strong quantitative data. And yet, that
broadly describes most turnaround
situations, as the timing and magnitude of earnings and cash flow
recoveries are so hard to model accurately. With that in mind, I think Finisar (Nasdaq:FNSR) could be in for better days as upgrade cycles in the data center and telecom markets take revenue and earnings higher.
Please continue here:
http://www.investopedia.com/
Please continue here:
http://www.investopedia.com/
Tuesday, September 4, 2012
Investopedia: Ciena Still Trying To Translate Tech Into Prosperity
I realize that many readers have little or no sympathy for sell-side
analysts, but I don't envy them the task of figuring out the telco capex
space these days. JDS Uniphase (Nasdaq:JDSU) and Oplink (Nasdaq:OPLK)
recently offered solid beat-and-raise quarters that stoked hopes that
the much-awaited carrier spending rally has finally come.
And then along comes Ciena (Nasdaq:CIEN); a company that has been introducing solid technology and gaining share, but sees less strength in the market right now. As befits its space, Ciena is a tough stock to figure out. While much more promising (and not nearly so beaten down) than Alcatel Lucent (NYSE:ALU), Ciena has to start delivering pretty substantial profit improvements for the stock to really work. The potential is certainly there, but then so are above-average risks as well.
Continue reading here:
http://www.investopedia.com/
And then along comes Ciena (Nasdaq:CIEN); a company that has been introducing solid technology and gaining share, but sees less strength in the market right now. As befits its space, Ciena is a tough stock to figure out. While much more promising (and not nearly so beaten down) than Alcatel Lucent (NYSE:ALU), Ciena has to start delivering pretty substantial profit improvements for the stock to really work. The potential is certainly there, but then so are above-average risks as well.
Continue reading here:
http://www.investopedia.com/
Friday, November 11, 2011
Investopedia: Cisco Dunks ... On The Kiddie Hoop
For all of the excitement about Cisco's (Nasdaq:CSCO) "strong" first quarter, an important detail seems to be overlooked. Namely, that expectations have been going down steadily on Cisco for some time, and if the company couldn't beat this low hurdle, that would be a sign of some serious problems indeed. Though I've long been a bull on Cisco's under-appreciated inherent value, investors should keep a little perspective here and realize that Cisco is not exactly fully in the clear just yet.
A Mildy Encouraging First Quarter
After a rough stretch of financial underperformance, Cisco did announce estimate-beating revenue and 5% year-on-year growth. Product sales grew 3% from last year and were roughly flat with last quarter, while service revenue picked up 12 and 1%, respectively. Switching and routing were both reasonably strong on a sequential basis (up almost 2 and 5%, respectively) and make up about two-thirds of the product revenue base.
Please continue:
http://stocks.investopedia.
A Mildy Encouraging First Quarter
After a rough stretch of financial underperformance, Cisco did announce estimate-beating revenue and 5% year-on-year growth. Product sales grew 3% from last year and were roughly flat with last quarter, while service revenue picked up 12 and 1%, respectively. Switching and routing were both reasonably strong on a sequential basis (up almost 2 and 5%, respectively) and make up about two-thirds of the product revenue base.
Please continue:
http://stocks.investopedia.
Monday, September 5, 2011
Investopedia: Ciena - Performance From Margins Or Marginal Performance?
The communications and networking infrastructure space is sort of like a primetime medical drama. The patients come in riddled with holes or coughing up blood, they stabilize, they seem to get better, there's a sudden turn for the worse (usually about midway through), and then about twenty minutes of artificial tension as the outcome hangs in the balance.
Unfortunately for shareholders, there's nothing artificial (nor especially entertaining) about the travails and challenges for companies like Alcatel-Lucent (NYSE:ALU), Adtran (Nasdaq:ADTN), Infinera (Nasdaq:INFN), Finisar (Nasdaq:FNSR) or Ciena (Nasdaq:CIEN) these days. While the future of bandwidth demand has never looked brighter and customers are queuing up for new technologies in the 40G/100G category, inventory corrections, unstable order patterns and rampant competition have rippled through the sector for a while now.
The link below will take you to the full piece:
http://stocks.investopedia.
Unfortunately for shareholders, there's nothing artificial (nor especially entertaining) about the travails and challenges for companies like Alcatel-Lucent (NYSE:ALU), Adtran (Nasdaq:ADTN), Infinera (Nasdaq:INFN), Finisar (Nasdaq:FNSR) or Ciena (Nasdaq:CIEN) these days. While the future of bandwidth demand has never looked brighter and customers are queuing up for new technologies in the 40G/100G category, inventory corrections, unstable order patterns and rampant competition have rippled through the sector for a while now.
The link below will take you to the full piece:
http://stocks.investopedia.
Friday, August 19, 2011
Investopedia: China Mobile May Be Right For The Times
There are plenty of reasons not to like China Mobile (NYSE:CHL). Not only is China's largest cell phone operator closer to the Chinese government than many investors will find comfortable, but the company is also likely well past the point of exciting top-line growth. All of that said, though, this is a company with major market share, hand-over-fist cash flow generation, and a very solid business. Given how turbulent the markets are and the spasms that go with even modest disappointment, China Mobile looks like a dividend growth idea where investors can lay low for a while.
Second Quarter Results - Solid, But Not Scintillating
China Mobile's results probably won't impress casual observers, but they were better than many analysts had expected. First half revenue rose almost 9%, while second quarter revenue rose a half-point more. Second quarter EBITDA rose more than 7% (and margins compressed about 80 basis points), and net profit was up 7%. (For more on EBITDA, see A Clear Look At EBITDA.)
Read more at the link below:
http://stocks.investopedia.
Second Quarter Results - Solid, But Not Scintillating
China Mobile's results probably won't impress casual observers, but they were better than many analysts had expected. First half revenue rose almost 9%, while second quarter revenue rose a half-point more. Second quarter EBITDA rose more than 7% (and margins compressed about 80 basis points), and net profit was up 7%. (For more on EBITDA, see A Clear Look At EBITDA.)
Read more at the link below:
http://stocks.investopedia.
Friday, March 11, 2011
Investopedia: Severe Static For Telco Providers
When a sector sits in the top 5% of sector performance, it is often a safe bet that momentum investors have crowded into the stocks, and expectations are running hot. Unfortunately, the very nature of the momentum game means that the stocks can get rocked at the first sight of cracks in the growth story.
Such is the case for companies in the telecomm equipment space these days.
Investors had been piling into stocks like JDS Uniphase (Nasdaq:JDSU), Finisar (Nasdaq:FNSR) and Ciena (Nasdaq:CIEN) on the idea that the spread of smartphones and tablets is going to strain the networks of service providers even further and lead to significant capacity upgrades. To be fair, growth had been looking good off the bottoms of the recession and demand in China has been strong.
Unfortunately for investors, it looks like the sector has hit a pothole. Although JDSU gave pretty encouraging guidance not all that long ago, Finisar had a much less rosy outlook. Not only did Finisar cite weaker growth in China as a proximate cause, the company indicated it was an industry-wide phenomenon. Couple that with disappointing guidance from Ciena, and the stage was set for a significant pullback.
Please continue to the full piece:
http://stocks.investopedia.
Such is the case for companies in the telecomm equipment space these days.
Investors had been piling into stocks like JDS Uniphase (Nasdaq:JDSU), Finisar (Nasdaq:FNSR) and Ciena (Nasdaq:CIEN) on the idea that the spread of smartphones and tablets is going to strain the networks of service providers even further and lead to significant capacity upgrades. To be fair, growth had been looking good off the bottoms of the recession and demand in China has been strong.
Unfortunately for investors, it looks like the sector has hit a pothole. Although JDSU gave pretty encouraging guidance not all that long ago, Finisar had a much less rosy outlook. Not only did Finisar cite weaker growth in China as a proximate cause, the company indicated it was an industry-wide phenomenon. Couple that with disappointing guidance from Ciena, and the stage was set for a significant pullback.
Please continue to the full piece:
http://stocks.investopedia.
Thursday, February 17, 2011
Investopedia: Agilent Goes Three For Three
It is interesting to see that however sophisticated the markets get (or market participants think they are), there are still plenty of oddities. For a decent stretch of time, Agilent (NYSE:A) was undervalued. Then it began moving on no particular news and not only made up the valuation gap but perhaps overshot it a bit. Individual investors can look at this in one of two ways: Take heart from the fact that the "professionals" leave plenty of fat opportunities on the table for retail investors, or despair that the market is less about finding and assessing value and more like a casino full of hyperactive traders with attention deficits.
The Quarter That Was
Agilent reported a very solid beginning to its fiscal year. While revenue was a bit light relative to expectations, that seems to be solely a byproduct of some revenue recognition adjustments tied to the acquisition of Varian. All in all, revenue rose more than 25% from last year (though down 4% sequentially). Organic growth was led by measurement and test business (up 31%), with both chemical analysis and life sciences chipping in high single-digit growth as well.
Profitability was a little bit of good and bad news, more heavily weighted toward "good". Gross margin slipped almost a point from last year, but moderate growth in SG&A and R&D spending allowed the company to deliver nearly three full points of operating margin improvement. Although gross margin is important, there is still a "settling in" process going on with the company's acquisitions and divestitures, so this quarter's decline really does not seem like anything to worry about at this point. (For more, see R&D Spending An Profitability: What's The Link?)
Please continue to the full text:
http://stocks.investopedia.
The Quarter That Was
Agilent reported a very solid beginning to its fiscal year. While revenue was a bit light relative to expectations, that seems to be solely a byproduct of some revenue recognition adjustments tied to the acquisition of Varian. All in all, revenue rose more than 25% from last year (though down 4% sequentially). Organic growth was led by measurement and test business (up 31%), with both chemical analysis and life sciences chipping in high single-digit growth as well.
Profitability was a little bit of good and bad news, more heavily weighted toward "good". Gross margin slipped almost a point from last year, but moderate growth in SG&A and R&D spending allowed the company to deliver nearly three full points of operating margin improvement. Although gross margin is important, there is still a "settling in" process going on with the company's acquisitions and divestitures, so this quarter's decline really does not seem like anything to worry about at this point. (For more, see R&D Spending An Profitability: What's The Link?)
Please continue to the full text:
http://stocks.investopedia.
Monday, February 7, 2011
Investopedia: JDS Uniphase Comes Through Loud And Clear
Tech investors have not been too forgiving to companies through this earnings cycle, but JDS Uniphase (Nasdaq:JDSU) largely took matters into its own hands with a stellar result. While there is still plenty of room to debate JDSU's long-term future, the near-term outlook for optoelectronics seems to be pretty strong.
A Blowout in the Fiscal Second Quarter
JDS Uniphase delivered everything investors wanted in its fiscal second quarter and then some. Revenue jumped 16% from the first quarter (and 39% from the year-ago level) and handily smote even the high estimate on the Street. Revenue growth was definitely fueled by test and measurement business (up 27% sequentially), but the optical products business was no slouch at 14% sequential growth. While the Advanced Optical Technologies unit saw a 10% sequential revenue decline, analysts did not expect a lot from this business.
As revenue jumped ahead of plan, the company was able to leverage better profitability. Gross margin increased 140 basis points on a sequential basis, while the operating margin expanded 450 basis points to over 15%. (For more, see The Bottom Line On Margins.)
The Road Ahead
If management is right, this was not a one-quarter recovery in JDS Uniphase's business. The company guided for a level of March quarter revenue that looks to be about 7% higher than where estimates had been, and while there could be some sequential pullback in profitability, it would seem that numbers should be going up overall.
Please click below for the full piece:
http://stocks.investopedia.
A Blowout in the Fiscal Second Quarter
JDS Uniphase delivered everything investors wanted in its fiscal second quarter and then some. Revenue jumped 16% from the first quarter (and 39% from the year-ago level) and handily smote even the high estimate on the Street. Revenue growth was definitely fueled by test and measurement business (up 27% sequentially), but the optical products business was no slouch at 14% sequential growth. While the Advanced Optical Technologies unit saw a 10% sequential revenue decline, analysts did not expect a lot from this business.
As revenue jumped ahead of plan, the company was able to leverage better profitability. Gross margin increased 140 basis points on a sequential basis, while the operating margin expanded 450 basis points to over 15%. (For more, see The Bottom Line On Margins.)
The Road Ahead
If management is right, this was not a one-quarter recovery in JDS Uniphase's business. The company guided for a level of March quarter revenue that looks to be about 7% higher than where estimates had been, and while there could be some sequential pullback in profitability, it would seem that numbers should be going up overall.
Please click below for the full piece:
http://stocks.investopedia.
Wednesday, August 18, 2010
Agile Agilent
Agilent (NYSE:A) has always been something of an odd one out. Although the company boasts a market capitalization of approximately $10 billion, Agilent is relatively under-followed and often overlooked. Some of that is because of the unusual collection of businesses. The company has historically derived about half of its revenue from electronic test and measurement equipment and the other half from biological and chemical analysis equipment, and few analysts have expertise in both of those markets.
What may be Wall Street's pain can be a motivated investor's gain. Because Agilent does not get the close scrutiny of other names, and because there is not a small army of analysts flogging the stock to institutional clients, investors can occasionally pick these shares up on the cheap.
To read the complete piece, please go to:
http://stocks.investopedia.
What may be Wall Street's pain can be a motivated investor's gain. Because Agilent does not get the close scrutiny of other names, and because there is not a small army of analysts flogging the stock to institutional clients, investors can occasionally pick these shares up on the cheap.
To read the complete piece, please go to:
http://stocks.investopedia.
Subscribe to:
Posts (Atom)