I invested in a lot of ACLS shares based on their new product line which holds promise of winning them big market share increases in the next few years.
And that still appears to be a well-founded point of view.
However, what I failed to look at was the market for ion implanters overall. When they indicated the TAM in 2016 is projected to be lower than 2015 it made me realize this major oversight on my part.
Articles on the implanter market lead me to now realize that the future for ion implanters is not necessarily a great one. I see articles talking about how some new semiconductor process nodes may rely more on doping techniques other than implantation.
In light of this I am now thinking my expectation that ACLS will rise to $10 or so per share over the next 2-3 years may be naive. I still think it's a decent investment, but the upside may be a lot less than I thought.
We all know INFN is a strong technology company, but I would think that in general most all stocks have about a 50/50 chance of going up or down. INFN has great business prospects, but expectations for the company reflect that. A good quarterly performance is a disappointment leading the stock to go down while an excellent quarterly performance will push the stock higher.
That being said, the stock isn't exactly toppy right now as it has had its fair share of decline in the recent market slump.
So I think the upside potential is better than the downside for today's quarterly report.
A little turbulence here and there, lots of forces working toward this company doing awesome in the long term.
Synergystic benefits of Infinera+Transmode business clearly will take a few quarters to get the verdict on.
That short haul data center issue a month or two ago sounds like it it is of negligible significance.
whoops. I checked my notes, Feb 11 not Feb 2. That is great, I thought I had a schedule conflict and had to decide whether to listen to ACLS or INFN today.
That would only bring the stock price back to where it was a few months ago. I would prefer to see $5-6 billion.
They sure talked a lot about the reorganization in the conference call. I don't have much basis to judge whether it sounds good or not. I guess the basic idea is organize along "verticals", which I gather means divide up the organization in groups focused on particular industries and thus be able to tailor the products to meeting specific needs of that particular industry, instead of making generic instruments.
I would imagine the tradeoff is potentially less economy of scale selling lower volumes of a lot of specialized products rather than higher volumes of generic products. However, I presume that their goal is to standardize the products as much as possible except for those features of the product where specialized features provide a real benefit for the particular application.
Volatility is just opportunity. What matters is what is this company's prospects? If it is destined for a share price of let us just hypothesize $40-50 two years from now, whether it is $14 per share today or $20 per share today in my view has absolutely zero bearing on where we will be two years from now. But it does mean that you will get a lot better return if you are able to get some today at $14 rather than $20.
Q&A session generated a lot of questions prefaced with "congratulations on the great quarter"
Afterhours is sketchy on a small company like this but it appears it may be up a buck or so tomorrow.
At 12 INFN's enterprise value to gross profits ratio is about 4. I consider a ratio of 4 a reasonable valuation for a good solid tech company that has 5-10% annual growth on a sustainable basis.
For a much faster growth company like INFN, it's a great value.
Those who have been emphasizing metro I think are on the right track. If INFN's success is limited to transport and data center then they will be a mediocre investment. If they can marshal up some synergies to become a major player in metro, they should be a good investment.
Wonder if there's any possibility of a buyout on the horizon. Techs love to do growth rather than value investing. NANO is moving from a value to growth stock as their business performance improves while their stock price is no longer as great a bargain. Just the kind of company others like to snap up.