reporting robust numbers. SANM, FN, upping projections. somebody putting in orders. the FN report especially seems to bode well for the optical sector.
You obviously have to look at the macro cycle, which started to slip in 2011. Now, 100G is just getting started.
In 2011, the number of shares outstanding was 49M, compared to 110M now (even excluding the convertibles). Annual revenues per share were $9.5 compared to $3.2 now. Book value was about $4.5 compared to $1.4 now. Conclusion: $18 in 2011 is the equivalent of about $6 now. Mind you, $18 in 2011 was an inflated value because the earnings were pittance. Conclusion: if the stock gets to $6 be happy and sell.
In 2011, the number of shares outstanding was 49M, compared to 110M now (even excluding the convertibles). Annual revenues per share were $9.5 compared to $3.2 now. Book value was about $4.5 compared to $1.4 now. Conclusion: $18 in 2011 is the equivalent of about $6 now. Mind you, $18 in 2011 was an inflated value because the earnings were pittance.
re: ....others knew of inventory builds
I am not sure that they have that type of visibility in telecom. Your assumption of Oclaro's disclosure that 40G revs would go to zero was based on inventory builds is not correct. Oclaro was referring to its legacy 40G telco, a temporary solution that, if my memory is correct, Finisar skipped entirely. Finisar's 40G single mode products were for long reach links that MM fiber couldn't handle and for data center interconnects.
re: Isn't that 40G slowdown the crux of FNSR's current fall?
No. 40G in the data center is still strong, comprises 25% of Finisar datacom revenues, but it is now a low end market since its 10G based. The push out of 100G (25G based) is what is hurting and 40G is being retained longer because 25G ASICs needed in the new switches have not reached volume production (ie Broadcom's Tomahawk chips).
The problem with optics and (Finisar since it is a broad based optical supplier) is the rapid price erosion of legacy (products 2+ years old) that have not been replaced by new, higher margined products. When new product ramps get pushed out, the tier 2 OC suppliers catch up and competiton gets very nasty. This is the problem that nearly killed Oclaro a couple of years ago and forced it to become a niche 100G provider.
If the optics business operated as it is modeled, new product ramps would happen approximately every two years, maintaining healthy margins and return on R&D. Annual pricing declines are based on a functional model but its obvious the model is broken with all of the push outs and delays. Unfortunately, the service providers don't mind as their costs fall but it wreaks havoc on the component makers.
re: I'm bullish OCLR. Why aren't you?
I also own some Oclaro. I think their chances for improving numbers in the short term are better than Finisar's.
re: Heh, heh .... so...... you read my post and chuckled, "heh, heh." I know what ran through you head at that moment wasn't what you posted, or your post was, at the least, much more diplomatic than what you were thinkin. Lay it on me. But, before you do, let me reiterate my trust in OCLR management to tell it like it is. That's what my post above is saying. When AFOP, AAOI, NPTN, FNSR had nice qtrs. because of sales that they knew were due to inventory builds, that they knew were going to have to be worked off, that they knew was likely to cause softness somewhere in their near future..... did their management teams come out prior to the softness and let the shareholders know. OCLR's did. Now, this ones likely to get your ire up a bit and I was not even going to write it due to the fact that I respect your sector knowledge and your posts...... but....... when OCLR came out @ the beginning of 2015 and said they anticipate their 40G going to zero, did FNSR management say Anything on their end, when they were tradin above $20/sh. I don't know that answer myself, but from the # of FNSR posters calling for the heads of the current mgmnt team, I'm guessing they didn't give any visibility. Isn't that 40G slowdown the crux of FNSR's current fall. I trust the OCLR team. They kept the best engineers from OPXT and got rid of the rest (I know FNSR would die to be able to go back and pick up OPXT). They have already done all the restructuring and fat trimming that FNSR and LITE are going to be doing over the next year or so. They have cut their operating costs right to the minimum and still maintained a leadership role in the space. I'm bullish OCLR. Why aren't you?
re: working down inventory before purchasing more components.
Heh, heh....check out what has caused the biggest ramp downs in component buying since the bust 15 years ago...yeah, that's right, inventory corrections, and when they happen, it has usually lasted for several qtrs or even a year or more.
A common occurrence whenever one begins hearing 'constrained capacity', by the opticals; leading to over ordering and inventory build ups. And has often taken up to two years to correct, so I wouldn't take this lightly...the street surely doesn't.
The bulk of AFOP's comps were good. The big miss was due to their largest customer (web 2.0 customer) working down inventory before purchasing more components. Sounds like AAOI had same issue. Web 2.0 purchasing lumpiness. OCLR had same issue 15 months ago with sales in China but said in guidance that the next qtr would be soft instead of waiting for qtr to end and reporting weak #'s. Good #'s or bad, OCLR's guidance has been pretty accurate since Greg took the helm. Agree guidance will be the key to OCLR movement and don't believe OCLR would have preannounced if next qtr wasn't looking good, but preannouncement may have been just to let large holder know things are looking ok for OCLR, so don't sell. I'm still bullish OCLR.
Guidance is always the biggie. GIG beat and raised and the street is expecting strong guidance from Oclaro likewise. It would be really stupid of management to disappoint with guidance after preannouncing a strong qtr.
AFOP, FNSR, & NPTN all took big hits. Will be really interesting to see what Oclaro is experiencing since AFOP is a big source of supply for InP to fabless transceiver makers and posted horrible numbers.
I'll keep this short and sweet...Google "PennyStock101' signup for their free newsletter and get their next trade alert. Come back and thank me tomorrow!