JDS Uniphase (JDSU)

[riverhigh22]

I would say there will be major movement in JDSU (good or bad ) within one year based on the following:

1) The market thinks ahead 6 months. This time next year the market will be predicting Jan 2005. We should know if the Fibre optical components industry will survive by then.
2) Hopefully jdsu will have reduced their breakeven to 170 million a quarter (end of their 2004 fisal year - June 2004). All jdsu needs is a slight improvement in demand to show a small profit. With their leadership role I think they will command a minimum of $6 a share.
3) If, this time next year, the Fibre optics industry is still in a severe depression as it is today, jdsu will be the major benificairy (this is my gut feel) of picking up sales from their bankrupt competitors. Neither Avanex or Bookham (jdsu's 2 major world competitors) have the cash to survive 2 years. Both have cash reserves for a maximum of 6 quarters (I think their creditors will pull the plug on them way before they reach that point). Bookham has about 130 million dollars in free cash as so does Avanex (if you take away all the free cash that Avanex will use in consolidating their newly acquird businesses). Quite honestly if jdsu did not have 1.3 billion in cash and no debt I would not give this stock a second look.

With Vitesse closing the doors on their optical unit last week, along with the sale of Ditech's opical unit to jdsu for a pittance 1.5 million the week before... there are interesting times ahead of us. At the beginning of this year the general consensus was that the Fibre optic components players from positons 1 to 3 would do well. Right now I can see either Avanex or Bookham landing up in chapter 11.