Friday, September 14, 2007

 

Midnight Research

Everyone on Wall Street is pounding the bull drum for CSCO, FFIV and JNPR. They say "the networkers are back dude, get in now or lose your spot on the green gravy train." However, taking a closer look at the sector, but not detailed, there is certainly a "tale of two cities" being played out.

Forget the above names. Look at ALU, RCNI, BRCD, EXTR, BBND, JDSU, SVVS, EQIX, MSPD, LLNW, AKAM, NT, BKHM, DVW, FNSR, MTZ, TLAB, AVNX, MRVC, SONS, SCMR (40 cents away from cash), GLBC, LORL, AFOP, INAP, HSTX, LVLT and CNXT.

Most of the above stocks are at/near their 52 week lows or in a serious downtrend. Now, either CSCO, JNPR, FFIV, AVCI (biggest customer is ATT wireless), NETL (biggest customer is Cisco), CAVM, LNOP, ADCT and GGBM are outsmarting everyone else; or they're extremely overvalued.

As you know, "The Fly" has been a long term bull on the sector. Over the past two years, I've had big positions in EQIX, GLBC, LORL and AKAM, but not anymore. Recently, thanks to a tip from a source, I checked my EQIX and gave up on the sector, with the exception of my recent LLNW endeavor.

Many years ago I got my balls shot off, via a multi million dollar ADCT position. As you can imagine, this "fun" happened after the dot com blow up, 2000-2002. Believe it or not, long after the initial blow up of the dot coms, ADCT was still making new highs. Then, after getting all comfy and "prosperous feeling," it shot my balls off. Within a year, the stock had a $2 handle, sending "The Fly" to a mental hospital, where he luckily acquired his "calculator brain" and "time machine" from one of his fellow inmates.

In short, I believe this sector is a leading indicator for the entire technology space. Right now, everyone is busy with the big winners and ignoring possible warning signs, such as this.

Is it pricing pressure or a slowdown in business, due to cut backs from the big boys?

Bottom line: Either FNSR, AKAM and GLBC are tremendous buys down here; or CSCO, JNPR and FFIV are the Mother of all shorts.

Comments:
Thanks for the late night post.
 
Fly,

are you still bullish on the markets?
 
neutral, but heavily long.
 
Just walked in from a late night bicycle ride, we go down tomorrow as the streets were too quiet. No consumers to be found, quite scary out there.
 
The only problem with that sign is that ALU, and LU before it, have sucked dog's dick for a long time. So have CNXT, JDSU, NT, BKHM, and---of course---DVW. Certainly there are better places to be than this group.

That said, do you think that GLW, down a buck today, is in the same boat (I know, they're more levered to the flat panels).
 
Many of the above stocks have been dogs, but not all. And, it's getting much, much worse.

ALU down this much is scary. Plus, lets not forget how big of a company they are. There is bound to be ripple effects.

I'd avoid GLW.

There is something to be said when AKAM is struggling to hold $30.
 
Quick thought: Maybe it's because this industry is so dependent on the commercial paper market.

Perhaps, many of them are in danger of defaulting, due to failure to price paper.

I haven't delved into it too deep. But I will.
 
That's a great point about financing.

Shouldn't machinery cos, like IR or DE, have this same problem? I don't know the details.
 
IR and DE are highly profitable.

Most of the networkers issue junk paper.
 
great piece Broker ... VOD DT FTE TEF hitting highs . They write the checks for the ALU's, they haven't had a need to spend since the 2000 dot.bomb blowup

yeah , big dichotomy here ... I think JNPR CSCO are definitely shorts or shorts in the making .. wouldn't go long, thats for sure

too many players still, 7 years after the bubble
 
It looks like la grande (OTR?) is an early morning winner if he went long QID at the close as he said he would do plus his PALM calls should do well as the shares were upgraded to outperform by Morgan Keegan. More $$ for McDonalds dinners in Flagstaff? Maybe he gets his trades from his horse like Wilbur used to do from Mr Ed.
 
I rode ADCT from $12 to $20 recently but bugged out in the recent "troubles."

Bernie Schaeffer's group just recc'd JNPR, fwiw.

My take -- there's been enough time to absorb the overbuilding in this arena*, just like there has been for the storage areas (I have a client in hosting who is just now beginning to see some price strenghtening), but that does not mean all of these dinosaurs (like the fuckwits at Frenchie Alcatel-LazyAmelican Lucent) are going to ever recover to the glory days.

I wouldn't trust ADCT management, iow, but perhaps JNPR is not such a bad call here.

___________________

* I exclude the bandwidth providers like AKAM and your Limelight Nightclub Stock from this "recovery" set because I think they've been overvalued for quite some time, and there are "glut" problems that exceed those of storage and networking.
 
"Quick thought: Maybe it's because this industry is so dependent on the commercial paper market."


_____________________

I guess I haven't been on the site long enought to know always whether or not you are kidding.

___________________

Please tell me you are kidding.
 
Broadband wireless seems to be relatively immune as well.... ANAD and ALVR have both had nice runs...
 
I like AKAM under 30
 
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from what I read there was massive call buying in RIMM yesterday ... so now we know why; cause the fuckers gave the wink to their clients that they were gonna upgrade tomorrow ... sec ought to look into this type of crap .. goes on all the time
 
Gold running again. Next stop $850, then & $1000+?
 
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Silver and Gold, Silver and Gold....

Get your Yukon Cornelius wool cap and twisty mustache on, fellahs.

GG, GFI, GLD.

SLV, SLW.
 
$2 to anyone with a good explanation for NTRI.

WTF? Consumer sentiment is down, so people start carb loading?
 
Hmmm... something not right.

Consumer sentiment down, but ultimate self-indulgent boomer toy stock HOG ... up??
 
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The top for networkers will be when HD video out sells the now standard DVD/HDVD. Until then it will be an arms race for anyone and anything that wants to do video.

CSCO, AKAM, LLNW, and FFIV should do fine.

Pick your networkers wisely
 
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Watch GS if Market is going to turn up IMO.
 
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Well I am sorry to say for UNG longs that the cunt Ingrid is going to head back home to her homeland. Crude Broker was exactly right and even though he brother is Frankie Bones he deserves a little credit. Selling my UNG position here for the small profit I have.
 
On another note look at the fucking monster run MPEL has been on over the past couple weeks. Damn.
 
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The networker I find interesting is PKTR only because Paul Singer and Robert Chapman have recently taken stakes of about 10% each at higher prices than where it currently trades. Chapman agitated for an i-banking auction, which was rejected, so now he's planning a proxy fight for board seats.

And as for Singer, he's got a few billion under management so I'm surprised he is fucking around with a tiny $250 million market cap company. But that old fucker knows how to make money, so he either sees value there or has a plan to create value.

I honestly don't know what they see in it, but I've made two trades below $7, so I'm going to tag along for the ride.
 
gappingandyapping: Ingrid is pretty much a non-issue at this point. Natty is spiking, again, on traders fearing "The Return of Humberto."
 
MVIS is gay
 
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MVIS is out-of-the-closet, in-your-face, Chicago-gay-pride-parade, fucking gay.

Ready to toss this wienner, DIVX style.

BTW. Midnight post and comments chain best in a long time. Fox Biz Channel take note.
 
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If you got your "balls shot off years ago," how is it possible that you can make "big dicked gains" nowadays? Prosthesis?
 
Fucktard MVIS's headquarters is at Halsted and Addison.
 
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Hey Fucktard-You need to tell Hillary that she better tell Sandy Berger to wear extra long pants as her National Security advisor.
 
Kind of a mixed bag of news for EQIX this morning.

Dilution as opposed to more commercial paper issuance.

Business appears to be chugging along.
 
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Bill--

Note the acquisition of the "time machine" and "calculator brain."
 
Jake - you'll need an invitation to my blog - if you want - write to
Lucy at pillowmagic@hotmail.com
 
Tell us how many shares you are really buying poussy and stop with the mind games. You are a fucking prick btw.
 
Great post. The humble fly I have known is back. Keep it up
 
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