A "ton" of shares? I don't think so. Mostly small trades, probably for tax purposes. Over the past 3 months, insider buys outnumber insider sells by a factor of eight to one.
Sentiment: Strong Buy
InP Photonic Integration
The Enabling Technology for 100Gbps and future
Andy Carter, Chief Technology Officer
June 23rd, 2014
(available online in pdf)
4 months after I told ya I wasn't sellin @ $2.00, this time, we are @ 2.80. 40% up in the last 4 months. There is not an investor out there that wouldn't be overjoyed to have that gain, especially since the overall market is down. 40% up in 4 months Moon. I'm hopin you drank a little koolaid back then. As far as where is OCLR goin from here, my guess is we trade up to the $3.50 level goin into earnings. Since Greg has taken charge, OCLR has hit the upper end of their own guidance. I see no reason to doubt their existing guidance for next quarter, high end of it being EBITA breakeven. They hit that, and guide for actual profit for CY Q4, FY Q2 and OCLR will go right to $5 or better. Have a little koolaid Moon. Enjoy the ride.
Andrew is an extremely smart and accomplished analyst. This guy doesn't pump companies. He only talks about the benefits of technologies produced by companies because he knows how these things operate under the hood. He has an engineering background, so he understands all the nitty gritty. A few years ago he talked about how Infinera was in the right place with their tech. Look where the company is now.
Sentiment: Strong Buy
Adam Carter (CCO) presentation on Oclaro fabs and production
"InP and Photonic Integration
• ‘gold standard’ material for laser, detector fabrication
• InP Tunable lasers transformed WDM optical systems
• OCLR has supplied more than 0.5M devices for field deployment
• InP based modulators have enabled very efficient, small form factor modules
• OCLR has invested heavily in InP fabrication, with high volume, efficient and capable fabs
• The minimal footprint of InP based devices enables scaling to millions of 100G ports per year, with our current 3” wafer processes
• Our InP process is highly flexible with low development cost
• Inexpensive ‘tape-outs’ and mask sets
• Rapid development cycle
• Extensive design, modelling and layout tools
• Photonic Integrated Circuit design based on component element library
• Industry leading investment in On Wafer Test (OWT)
• Fab has scalability to 10000 InP wafers per year, so can meet market demands for many years
Photonic Integration on InP is now enabling the new generation of 100-
200Gbps coherent modules, bringing cost effective coherent solutions into the
metro network "
What is the % difference between where they are today and full production? Selling for tax purposes huh? If you knew the share price would double from todays price why wouldnt you wait and make much more money later than selling today? Cant see why anyone would not want to pay the higer taxes from zero to $6 a year down the road. You walk away with much more money if you waited. Selling at the near 52 week high for tax reasons dont wash with me. Tell me you would not want to pay more in taxes if this doubles and still walk away with an additional 50 plus %. Management has always dangled profitability two quarters away and them selling at $2.70 for the so called tax reasons implies profitability will continue to be two quarters away every earnings release.
The 100G CFP2 ACO is the hit product for 2016. Volume production only starts in calendar Q4 2015.
Think about Oclaro 2016 quarterly sales at $150 million with 30% GM's with the 100G CFP2 ACO ramped to full production. Right now OCLR is selling older 100G products so the impact of the 100G CFP2 ACO on sales and profits only begins in calendar Q4 2015. Volume production is in 2016.
Concerning the award of options at zero dollars, Oclaro management had to sell shares to pay the tax between zero and the market price of about $2.70. If they hold the shares for one year then they pay long term capital gains tax rather than ordinary income when they sell these zero dollar cost shares. This is a bet on the OCLR shares going much higher and reducing taxes.
Okay 100G sales up 40% but still cant breakeven. They say they need mid 90M in revenue to breakeven. How far out is that? Does the china currency manipulation work for or against oclaro? If things are going great why are the insiders dumping shares. They dump about 113K shares at 2.70 and acquire 755K shares at a price of zero. If you were working for oclaro and was in the no and knew big things are just a quarter or two away why would you sell shares now? At what capacity is oclaro running things? If the 100G demand is here and they are running at near capacity what happens when the other companies start cutting prices?
I am not drinking the coolaid yet.
How much can OCLR sales increase in 2016 with the 100G CFP2 ACO module in volume production?
Will we see a OCLR quarter in 2016 with $150 million in sales at 30% GM's?
For a buyout, I'd want at least 8.5 a share, but where OCLR Is at now, I don't think so.
I think we have BIG gains ahead in 2015 and even more in 2016. I think an upgrade is due and will be a catalyst. This stock should be above 4 right now. There's still just too much fear, but the industry is rising and OCLR is a leading player in high margin. high growth components. It's just a matter of time...