Make Sure JDSU's Promise Has Right Fit
This column was originally published on RealMoney on Nov. 28 at 12:11 p.m. EST. It's being republished as a bonus for TheStreet.com readers.
If I told you that I had the best single anticounterfeit play to stop the rampant pirating in China, you'd buy it in a heartbeat. If I told you that I knew a laser company that wasn't at its 52-week high, even though it is a precision, non-industrial laser company with great growth potential, you'd leap at it. If I told you I had a pigment company working on photovoltaic properties that allow you to have everything from a soccer ball that glows in the dark to a tamper-proof $20 bill, you would say, "Let me take that sucker right now."
But what if I told you the play was buried within a company and that it was, at best, 25% of the company's prospects? What if I told you the rest of the company was a parts supplier to Lucent (LU), Cisco (CSCO), Nortel (NT), Verizon (VZ) and BellSouth (BLS)? What would you do with a company that could get squeezed by Cisco in order for Cisco to make enough money selling equipment to SBC (SBC)? And how would you react if I told you that this company has its hands full with competition from Agilent (A), the great test and measurement player?
You'd probably say, "Get me to stock loan; can I borrow some shares to sell it short?"That's how I felt after meeting with some of the new management team from JDSU (JDSU). Actually, "new management team" is an understatement. This company is a vastly different enterprise from the hydra-headed, shotgun-wedded piece of junk that was JDSU under that guy with the beret. This is a company that has spent the last two years in deep purgatory, under the radar, attempting to salvage itself, to reposition itself, to reduce cost and yet still have a business. Because of the cash hoard it has -- remember, JDSU financed itself at its high, so it is like a dot-com that socked away money and didn't bleed it -- it has been able to buy some companies and to sell and close a lot of others.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV