We are fortunate to have Kevin staying on top of INFN. He has found out a lot of information about probable INFN business wins that were not directly announced by INFN.Thanks to Kevin, we see these quite often, and it gives the impression that INFN is really kicking butt on expanding its business by winning new customers and expanding business with existing customers.
We also have the INFN investor presentation which shows that INFN has been outpacing its competitors (slide 10…at least when it comes to stock price appreciation).
Then we have market reports/forecast that predict that the businesses where INFN competes will grow by leaps and bounds in the coming years.
Now combine all of the above and compare it with our P/E and 1YRPEG data (14.8 and 0.12, respectively), and one could easily conclude that INFN might be a great investment.
OK, now let’s think about something. Tracking INFN’s business wins is great, but shouldn’t we also be tracking the business wins of INFN’s competitors? They are Ciena, Huwei, and Alcatel-Lucent. It would be useful to know how these guys are doing compared to INFN. In a growing market there is room for multiple companies to do well, and it seems that the companies compete in a growing market. But let’s not necessarily assume that because we see all these press releases that INFN is beating the competition. We should be looking at everything, including the business wins of the other companies.
with our P/E and 1YRPEG data (14.8 and 0.12, respectively)
Just a quick correction, Chris. The current price is $14.80 – the adjusted P/E is 21.4. I believe that’s still the lowest adjusted P/E it’s traded at over the past couple of years.
Tracking INFN’s business wins is great, but shouldn’t we also be tracking the business wins of INFN’s competitors? They are Ciena, Huwei, and Alcatel-Lucent. It would be useful to know how these guys are doing compared to INFN.
Chris,
CIEN
Revenue Growth 17%
Earnings .54, .59, 1.31 or 122%
Price 18.02
PE 13.8
1YPEG 0.11
Debt/Equity 209
Short % of Float 19%
ALU
Revenue Growth 5%
Earnings -.54, .17, .07 or -59%
Price 3.91
PE 55.9
1YPEG -.95
Debt/Equity 200
Short % of Float <1%
INFN
Revenue Growth 34%
Earnings .03, .39, 0.77 or 97%
Price 14.8
PE 19.2
1YPEG 0.20
Debt/Equity 16.4
Short % of Float 11%
Competition has very high debt, inconsistent earnings growth, lower revenue growth (as stated from Yahoo Finance). Other competitors listed from INFN 10-K are private. I’ll stick with INFN.
There are some interesting things happening in the industry though
Cisco has come out of nowhere and won some optical deals. They closed an alliance with Ericsson who previously was reselling Ciena (and Juniper)
As of last week, there is no Alcatel-Lucent anymore. Nokia bought them and last week was the first day of the new company. Reason why Nokia bought ALU was its USA and China presence and its fixed access, routing, and optical, portfolio, plus its Nuage cloud business. That is a lot of capability to add so it will be interesting to see how/if that positions Nokia better for more business with their existing wireless customers, which are still significant in numbers.
Competition is not sitting on their tushes. I have not gotten around to it, but I am trying to create a matrix of how the main INFN competitors fit with specific optical opportunities. It is not one size fits all…INFN has dominated the MSO market for example, but i know of a few instances where they have been booted out of the running, and not because of price.