Optical components supplier Finisar (FNSR)
has a lot going for it. The company has leading share in the $6
billion-plus optical components market and good technology in attractive
markets like 10G/40G/100G transceivers and transponders, tunable XFP,
and WSS/ROADM. What's more, with a significant data center switch
upgrade cycle and ride-along potential in telecom with clients like Cisco (CSCO) and Huawei, growth over the next few years ought to be good.
The
real question for Finisar is whether a reader is comfortable buying a
stock that is highly unlikely to be a good long-term holding. Consistent
revenue and FCF growth in this market has been all but impossible, and
threats like silicon photonics loom on the horizon. I believe that
Finisar shares still look pretty interesting for the next year or two,
but I would be careful not to push my luck and hold them deep into the
cycle.
Continue here:
Finisar Has Room To Run On Data Center And Telecom Upgrades
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