Tuesday, April 6, 2010

Just Don't Sell Us (JDSU) Continues Lazarus Like Move

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Back in the day (1999) there used to be a stock that was viewed as Apple (AAPL) is today... it was called JDS Uniphase (JDSU).  Actually since it was a Canadian firm (now changed to US), perhaps Research in Motion (RIMM) would be an even better fit since it came to dominate the Toronto Index in the last part of the 90s.  A "can't miss" stock that had a decade+ of growth ahead of it as the internet buildout revolutionized the world.  Unlike Pets.com or other stocks that were valued on # of eyeballs or cuteness of its sock puppet, JDS Uniphase actually was a legit company that seemed a threat to the Cisco Systems (CSCO) of the world.
  • JDS Uniphase:  Its stock price doubled three times and three stock splits of 2:1 occurred roughly every 90 days during the last half of 1999 through early 2000, making millionaires of many employees who were stock option holders, and further enabling JDS Uniphase to go on an acquisition and merger binge.
Those were the days when I was a genius who could do no wrong in the stock market (so were many others!). 

Traders affectionately called it (J)ust (D)on't (S)ell (U)s.  Many people made many bucks on this stock; I assume it had to be one of the most widely owned stocks by the retail crowd... and then March 2000+ happened.  I don't know what its market cap topped out of (I am sure hundreds of billions of dollars) but surely something much higher than the current $3 billion - by multiples.  Here is a multi decade chart... frankly even this amazing "inverse V" does not do it justice.  As I scroll my mouse across the Yahoo Finance page I see JDSU topped out near $1050. [accounting for a large reverse split in mid 2000s]  Today's price is $13... and that's after a huge run the past year.

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After a decade of swimming in its own cesspool, Just Don't Sell Us is back... in Lazarus like fashion.  [Apr 1, 2010: 52 Stocks Returning 50%+ in 2010]  If it can rally a few thousand percent from here, a few investors still holding from 1999 might even make it back to even.

I've actually been reading up a lot on the name the past month since many of the same themes that worked in the late 90s are true again today in Web 2.0 (slash) mobile web, and it still has an intoxicating story to tell.  For 99% off the old price. ;) It was highlighted about 5 weeks ago, around $11 in [Mar 1, 2010: Fantastic Action in Small and Mid Cap Networking Space]  Just Don't Sell Us is even back to causing pitter pattering in analysts' hearts.
  •  An analyst raised his price target on shares of communications equipment provider JDS Uniphase Corp., sending the stock modestly higher to a 52-week peak Tuesday. RBC Capital Markets analyst Mark Sue increased his price target to $16 from $12, based on prospects that the company will integrate its acquisition of the network testing equipment business of Agilent Technologies Inc. earlier than previously expected.  The Agilent unit provides equipment to help monitor and troubleshoot networking gear. The deal is set to close in June.
  • Sue said the Agilent division has a higher gross margin and that would help improve JDS Uniphase's corporate gross margin to 47 percent from 44.5 percent.
To complete the circle of life I feel almost obligated to purchase the stock....

For any of you who are experiencing a Rip Van Winkle decade and just woke up... no worries, you didn't miss a thing!  In fact those Dow 10,000 hats we busted out are still quite useful.


JDS Uniphase Corporation provides communications test and measurement solutions, and optical products to telecommunications service providers, cable operators, and network equipment manufacturers.

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