I looked at the numbers of this Co. and read Q4 cc. I find all the numbers are fantastic. I cannot find anything wrong with this as an investment except for the following
cyclical - semi industry is notorious for its cyclical nature
very small cap - may be more fragile and more impacted when business environment changes
looks like thin management layer - what about corporate control and governance
insider sell – quite a bit
not sure but have a feeling that is sells heavily to china.
But the strong numbers overwhelms the weakness. I got a some today. thanks for bringing this stock to our attention.
AT&T started it off in November when it announced that it would be spending $14 billion over the next three years to greatly expand its wireless infrastructure, with the goal being to catch Verizon, which has more than doubled the number of cities that are 4G LTE-capable relative to AT&T. Following AT&T’s announcement, in 2013 we saw Japan’s SoftBank scoop up a majority stake in Sprint for $21.6 billion, giving the struggling service provider some much-needed capital to expand in 4G LTE network, and T-Mobile gobbling up MetroPCS Communications in order to instantly gain 9 million new customers.
The clarity you seek lies with fiber-optic and fiber-optic component suppliers By now you’re probably wondering, "How do we know this increase in spending is trickling down to equipment makers? The answer to this question is written entirely in fiber-optic and fiber-optic component suppliers, which have seen a revival of sorts this year. When telecom service companies announce a big boost in spending, it often takes a few quarters for that money to trickle down to fiber-optic providers. Have a look at some of these big EPS hikes in just the past three months.
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The tech upgrade cycle when it comes to wireless infrastructure is pretty straightforward. First, wireless providers announce the race to deploy new networks, then fiber-optic and fiber-optic component suppliers benefit, and then finally, networking equipment makers, such as data and networking optimization join the party not long after. With that mind in, here are a few companies that could be next in line to see big gains that you would be wise to have high on your watch list:
I find all the numbers are fantastic. I cannot find anything wrong with this as an investment
M
The only thing which seems to be causing the sell-off is that they predicted $22.5 million revenue and came in at $21.8 million. But this is a little company. Missing your prediction by 3% is a big “So what?” to me if they are up 79% year over year and up over 110% from the year before that when they had $10.1 million. It’s madness to sell it off 20% to a PE of 12 when it is growing at 80% per year. And paying an increasing dividend!?
How many little companies are making so much cash that they are paying a dividend, splitting the stock, increasing the dividend, and forecasting revenue up “over” 85% for the next quarter???
not sure but have a feeling that is sells heavily to china.
I’m not sure either, but I know their biggest client by far is ATT.
That may be a risk, though not out of the ordinary for a smaller company who rides the back of a large customer. INFN wish they had a ATT or VZ that would be their largest customer and a reference for them.
I think this is a really intelligent play and from many angles a less risky investment than lets say INFN or CIEN. I am not just talking about the valuation metrics vs growth performance, but I am talking about the business. From their annual report:
“Alliance Fiber Optic Products designs, manufactures and markets a broad range of high-performance fiber optic components, and integrated modules incorporating these components, for leading and emerging communications equipment manufacturers and service providers. We offer a broad range of products including interconnect devices that are used to connect optical fibers and components, couplers and splitters that are used to divide and combine optical power, and dense wavelength division multiplexing, or DWDM, devices that separate and combine multiple specific wavelengths. Our emphasis on design for manufacturing and our comprehensive manufacturing expertise enable us to produce our products efficiently, with high quality, and in volume quantities. Our product scope and ability to integrate our components into optical modules enable us to satisfy a wide range of customer requirements throughout the optical networking market. Our customers deploy our products in long-haul networks that connect cities, metropolitan networks that connect areas within cities, last mile access networks that connect to individual businesses and homes, and enterprise networks within businesses.”
In other words, their customer base is quite wide. They sell to service providers that have advanced engineering staffs such as ATT as they build, improve their own existing optical networks PLUS AFOP components are used in equipment manufacturers’ optical solutions.
Yes, it is a cyclical industry, but we are at the start of a new investment cycle which should last 5 years or so.
I am usually quite adverse to telecom related companies because it is such as tough business, but AFOP I am going to research more.
Thanks Bashaar, In other words, their customer base is quite wide. They sell to service providers that have advanced engineering staffs such as ATT as they build, improve their own existing optical networks PLUS AFOP components are used in equipment manufacturers’ optical solutions.
These people are competing with JDSU. I just did a short look at them but I would be interested in how wide their customer base is. If Calix or ALU is using their products that could be big but I am sure Infn does not use any of their equipment, and I doubt Ciena does either. The components that they make are not high tech but more a commodity product that almost anyone in the industry can make.
Wow, I bought some at $11.39 today and it closed at $11.91. The low was an unbelievable 11.16. When the market is in sell mode, unbelievable things can happen.
Good Job Saul.
I like that the company does not have any debt and I also like that they have been growing their cash. Also its impressive that they pay a dividend but I think I would rather see them put it back into the company. They sell attennuators, FOT’s, and SFP’s which put them in competition with Corning,ADC,JDSU,Champion and a number of other companies. They are selling 70% of their product to Data Centers and 30% to Telco’s. Their last conference call was impressive and I agree we should see phenomenal growth in this area for 2014. They are in the GPON space which is growing and will get bigger. I just need to look a little more into this. They also stated on their last conference call that some of their products are a commodity but they are selling it as a package so they are able to get higher returns because of the way they are mixing the product. (At least thats the way I understood it)
We started this long thread in February when AFOP was $12.50 [with a PE of 12(!) as I remember], after which it got as low as $11.39 (at least intra-day as I added a little there). It drifted up and closed at $13.22 Friday. I see it bounced to $14.81 yesterday while I was traveling, and only gave back 3 cents today. For anyone who bought with me back in February, Congratulations, but remember this is a high-beta stock and can bounce around.
I was one of the lucky ones who bought AFOP in February based on the attractive valuations you presented. It seemed like a screaming buy at the time. it still looks attractive at these prices to me but your point is well taken about its volatility.
Thank you for being transparent about an ailment most of us men will face as we age. Most of my friends struggle with prostate issues. Maybe I need a younger crowd to hang with.
And thank God you are beginning to experience some peace of mind regarding treatment options. That is worth everything.
Hang in there, Saul, and know you have so many supporters who have grown to admire and trust your financial acumen.
