Don't Be Tempted by Telco Equipment

"Unanticipated softness in order flow beyond seasonality by some of our largest customers."

That's Adtran's (ADTN - commentary - Cramer's Take) brutal statement from its earnings guidance cut.

It is also the reason why, to me, Alcatel-Lucent (ALU - commentary - Cramer's Take), Nortel (NT - commentary - Cramer's Take), Ciena (CIEN - commentary - Cramer's Take), Tellabs (TLAB - commentary - Cramer's Take) and JDSU (JDSU - commentary - Cramer's Take) are still not go-to names.

It is why Ericsson (ERIC - commentary - Cramer's Take) probably paid too much for Redback (RBAK - commentary - Cramer's Take). Let's add Nokia (NOK - commentary - Cramer's Take) and Motorola (MOT - commentary - Cramer's Take) to the mix, and all that is inside.

It is why only Cisco (CSCO - commentary - Cramer's Take) is investable because, like the Cisco of old, there's a mosaic of business that is not depending on AT&T (T - commentary - Cramer's Take) merging with BellSouth (BLS - commentary - Cramer's Take) or Verizon (VZ - commentary - Cramer's Take) placing big orders.

For as long as I have been in this game, people want to own telco equipment. I can't blame them.

The biggest hit I have ever had in my career, save Intel (INTC - commentary - Cramer's Take), was to be hugely long DSC Communications, the old DIGI, which kept getting everything right for many years before succumbing to an Adtran situation and then getting a low-ball bid.

This group is so tempting because it always seems cheap. But if you look at what has happened to a Tellabs or an Adtran over the years, the multiple's been taken out and shot.

You should, before you buy a stock, ask if the company has a modicum of control over its own destiny.

None of these telco-equipment companies -- the pure plays -- have any such control.

They are all sells to me, except Cisco.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this column.

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