hi growth, reasonable PE, just hit a snag lately
Henry
My first thought, since they make optical subsystems for communication, is - how easy is it for their products to be commoditized? Is there a lot of competition already?
At least they probably don't have to worry about Amazon. :) (Maybe that should be the first question we ask about any company - is Amazon a threat?)
The fiber optic suppliers have had a lot of volatility recently. Lots of growth in China driving it, plus all our data centers. Lots of competition, but lots of growth. Buy after the big dips, like now?
http://stockcharts.com/freecharts/candleglance.html?FNSR,LIT…
*not all of these are communications related, IPGP makes industrial laser as does IIVI. IPGP great company.
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See if you can get to this article
http://www.investors.com/news/technology/finisar-optical-sto…
Some fiber-optic component makers with exposure to China sold off on Wednesday on renewed worries over a slowdown.
Shares of Finisar (FNSR) fell 8.8% to 21.75 in the stock market today, its lowest reading since Sept. 1. Lumentum Holdings (LITE) slipped 5.2% and Oclaro (OCLR) lost 2.3%. Applied Optoelectronics (AAOI) was down 1.1% as NeoPhotonics (NPTN) fell 3.6%.
China in 2016 was a hot market for optical technology as its telecom companies upgraded both 4G wireless and landline broadband networks. Worries that orders from Chinese equipment makers Huawei and ZTE were slowing down pummeled fiber-optic stocks earlier this year.
According to a UBS report, NeoPhotonics has the highest exposure to China at 60% of revenue, followed by Oclaro at 40%, Acacia Communications (ACIA) at 40%, Lumentum at 30%, and Finisar at 20%.
Acacia slid 1% on Wednesday. Shares of another fiber firm, Ciena (CIEN), retreated 2.1%.
…
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The fiber optic suppliers have had a lot of volatility recently.
Tru dat. Yeppers, this is a vibrant, tumultuous and unpredictable sector. All of the players have been praised and scorned repeatedly. As an investor in INFN and ACIA, I’ve suffered through the chaos. It’s the nature of the beast. Growth in the telco/data transmission sector has never been steadily predictable. We’ve gone through several “generational” revamps within this sector. Now 5G/IOT/Big Data are coming in fits and starts. Such is life in this sector. All one can do is pick the horses carefully, keep a close watch and hope they win, place or show. Best to keep one’s emotions in check. Best to be patient.
Xanax helps.
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Acacia, in my opinion, is best of breed and has the highest Gross Margins(48% last quarter going up from 46%). ZTE one of their biggest customers has settled with the U.S. government on their problem with selling into Iran.
Acacia’s modules are rooted in its low-power coherent DSP ASICs and silicon PICs, which Acacia has specifically developed for its target markets. Acacia’s coherent DSP ASICs and silicon PICs are manufactured using CMOS and CMOS-compatible processes. Using CMOS to siliconize optical interconnect technology enables Acacia to continue to integrate increasing functionality into its products, benefit from higher yields and reliability associated with CMOS and capitalize on regular improvements in CMOS performance, density and cost.
Andy
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It has not been and it will be a good investment IMO.
The business has low margins and is somewhat cyclical. It is not particularly investor friendly and shell out tons of stock options.
it had its flare ups but the stock never went anywhere and I don’t think ever will in the foreseeable future.
it’s a money loser.
tj
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