Telecom Equipment's Come-Hither Shrug

This column was originally published on RealMoney on March 28 at 11:09 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

What a shrugoff of Oplink ( OPLK)! It's like nothing happened. The Ciena ( CIEN), the Finisar ( FNSR), the JDSU ( JDSU), just back on fire. The Bookham ( BKHM) lapping up the new supply. The Alcatel ( ALA) advancing despite the pressure from Lucent ( LU). Avanex ( AVNX) over $3, Mindspeed ( MSPD) up nicely. This group is not quitting.

Now, we know a pullback is due, but doesn't this group feel so 1990s, when Cisco ( CSCO) became a market darling? Doesn't it feel like the money's going its way?

I keep coming back to where these stocks were when there was telco spending vs. where they are now. There's just so much reason to believe that a new spending cycle is in front of us and you have to put some money down in the group.

The one that seems most solid to me is Ciena, because Gary Smith, who runs Ciena, had been most vocal in saying there was no momentum when things were bad, and now is most adamant that things are good.

He seems like he is the most bankable of all. But I have to admit, the whole group just remains totally tempting.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Oplink, Bookham, Avanex and Mindspeed to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.


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