Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Fun With Finisar


Merger, settlement bode well for technology player.


Barron's just ran a piece on Finisar (FNSR). The article offered solid analysis of the synergies of the Optimum (OPTM) merger and modestly bullish talk from the analysts quoted within.

I'm quite a bit more bullish on my longer-term price target than those cited in Barron's. My fair value on Finisar is two times sales, implying a stock price of approximately $2.90. Using the conversion ratio, this would put Optimum at $18.15.

Additionally, both companies just guided higher for the coming quarter. If the combined entity's sales see a marginal uptick from current levels and margins improve, my fair value estimate could be surpassed.

What are the pro traders saying about your stocks?
Minyanville's Buzz and Banter- 14 day FREE Trial

Finisar has also been engaged in a drawn out legal battle against DirecTV (DTV) that centers on a patent dispute.

The company had won the case with a verdict that awarded slightly in excess of $100 million (a large sum given its market cap). Later, a federal court overturned the damages, but asserted that six of Finisar's seven claims were still valid.

Now, a lower court will make a new assessment of damages. In the meantime, Finisar could try to work out a settlement. It's difficult to accurately predict an amount, but the potential remains for the company to be granted material damages that will bolster its cash and balance sheet.

< Previous
  • 1
Next >
Position in FNSR, OPTM

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos