It is so obvious that IT spending is still in the dumps and yet everyone is pushing the related stocks up through the roof.
Look at all the next generation fiber companies that went like the dodo; xoxo glbx wcg wcom 360 with lvlt and q barely hanging on.
There are no hords of cash (created by debt) for the like of CSCO, LU, NT, JDSU, CIEN, ect. and therefore no hords for PMCS BRCM AMCC VTSS CNXT etc. We will never see the growth explosion we saw in '98 - '00. The well has dried up. From here on out we get some steady growth at best until they come up with something new. There is still enought dark fiber out there to service the existing population for a few more years to come.
All this hype is just that hype. It will come back to fundamentals. It is only a matter of time and time gets shorter as each earnings report reveals the lack of super growth everyone is dreaming of.
What I find amazing about all these improving numbers is the fact that Cap utilization has remained flat through all this wonderful news. Utilization has to go above 80% on a sustainable basis before anyone even dreams of increasing capex. And in 1998 and 1999, unemployment claims were averaging under 280K weekly- it's funny how when the number creeps down a little below 400K everyone celebrates, not to mention how the previous week's number is always revised higher. Of course they have to go down at some point- otherwise there'd be no one left to fire!
I owned this stock in '99 and in '00. I traded in and out several times and was constantly amazed at the growth it was capable of producing.
Since then it has become obvious that the "high" times are over and this company will probably be a small cap forever if it is not gobbled up along the way. To me it is dead money here with only large downside potential. Kind of like WMT.