Tuesday, November 18, 2008

Not exactly a confidence booster

There was minor news out for some of my portfolio companies today, but the bigger item was released after the close. It came from Oplink (common 4.2% of portfolio, calls 1.0%), who said that they are retaining CEO Joe Liu. Despite any positive or negative attributes of this news, it's always unsettling to me when a plan is abruptly changed. It reminds me of the recent TARP bailout, which was intended to clean up bad mortgages and liquify the lending system, and then later refocused on other issues. When the people in charge change their minds so quickly, it chips away at my confidence that they actually know what they're doing. I hope that my fears are unfounded in this case.

In other optical news, Finisar (common 4.9% of portfolio, calls 1.9%) fell to a multi-year low of 0.36. I'm tempted to buy some more, as the stock now trades at a P/S ratio of 0.3 and a forward P/E ratio of 2. There is risk that those 2009 earnings don't materialize, but the stock price is reflecting a lot of pessimism at these levels.