This column was originally published on RealMoney on April 30 at 9:10 a.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.
: That's the way to play this
quarter, where spending is going to accelerate on optical businesses.
It's been ages since we had a spending cycle worth noting in telco (vs. the unbelievably strong aerospace cycle; witness
this morning). When we had the last one, it was fantastic for Ciena, JDSU, Alcatel, Lucent (pre-combination),
Corning signaled the strength last week, even though it seemed that people focused far more on LCD screens.
This morning, though, Verizon makes it very clear that spending's going to be huge for these businesses.
I don't want to overthink this. The stocks in this sector aren't expensive if Verizon is going to accelerate spending. Just check the upgrade this morning of Ciena by Weisel. It again signals that this is the moment.
Of these, JDSU is the most problematic. Its history of terrible execution could blunt the cycle. I have far more faith in Tellabs
which already had
its terrible quarter. I don't trust
at all after Patricia Russo got the nod to run the company, but this Verizon story this morning explains the strength after that miserable quarter.
Let me just add that I hate this group -- if only because if Verizon hiccups, you are dead. We aren't seeing this kind of spending from either
or, of course and much more significantly,
. But given that Verizon
reported, the window is open for some capital gains off this very big cycle.
Speaking of defense and aerospace, you have got to check out the
discussion of the
Boeing suppliers portfolio on
Stockpickr. I tell you, every day this site becomes a more value-added investing tool.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
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