Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Time to Invest in "Ultra-Broadband" Tek Stocks Just Like Google

Companies / Tech Stocks Oct 15, 2013 - 12:13 PM GMT

By: Money_Morning


Michael A. Robinson writes: They used to call it dark fiber...

It was the 1990s. Telecom firms plowed billions into fiber optic networks to prepare for the coming explosion in traffic for the web, wireless systems, and computer networks.

Turns out, the supposed "gold rush" was just a few years ahead of its time. So, much of the fiber optic systems sat unused. They were quite literally dark - no light, no data, was shining down the high-speed cables.

But quietly over the past few months, the fiber-optic sector has hit critical mass.

It's lit up like never before.

Consider that one small-cap leader has already handed savvy broadband investors gains of nearly 300% over the past year.

And with a market cap of just $342 million, the fast-moving stock still has plenty of room to run.

In a moment, I'll show you just what I mean...

First, we need to look at the big trends pushing this and other fiber optic stocks into the stratosphere.

Time to Invest in "Ultra-Broadband" Just Like Google

Simply stated, we have entered the era of ultra-broadband technology.

What that means, for users and investors alike, is that network demands are growing exponentially. And suppliers are scrambling to meet the need for higher bandwidth.

No less an authority than broadband supplier Cisco Systems Inc. (Nasdaq: CSCO) notes that Internet traffic has doubled every year for the past five years. And much of that data, voice, and video travel over fiber optic cables for at least a portion of the journey.

Several factors are pushing broadband needs like never before, Cisco and industry analysts note.

Let's start with the tidal wave of video demands brought on by YouTube, a unit of Google Inc. (Nasdaq: GOOG). YouTube reports that roughly 100 hours of video are uploaded to its servers every minute of the day, and that people watch about 6 billion hours of video a month.

Netflix Inc. (Nasdaq: NFLX) is a broadband provider's dream come true. The online video streaming service counts roughly 26 million customers, who watched roughly 1 billion hours of video in the month of June alone.

And these numbers don't count the millions of hours of corporate video that companies are hosting on their websites.

Neither do they account for what's happening in the TV industry, where broadcasters are gearing up for ultra-high-definition (UHDTV) sets. These are TVs that display images at roughly four times the resolution of today's high-def technology. That means they will soak up bandwidth like never before.

All this is occurring as the demand for web-centric smartphones and tablets is putting huge strains on wireless networks, which also use fiber optic systems.

Welcome to the Internet of Everything...

7 Trillion Sensors, Working Together

Consider that Google says it has activated more than 900 million devices using its Android operating system. Each day it adds roughly 1.5 million handhelds to the world's wireless networks.

Throw the Internet of Everything (IoE) into the mix, and you have years of pent-up demand for ultra-fast networks. As the name implies, the IoE means connecting nearly every physical object in the world to the Web.

Cisco says by the end of this decade some 50 billion devices will be on the IoE, and the number will quickly grow to 10 times that amount. And the giant German firm Bosch predicts that, by the time it's all said and done, we'll see some 7 trillion sensors transmitting data to the IoE.

Now you know why the broadband industry is building out networks to deliver a 10-fold increase in capacity from today's pipes, now more than a decade old.

We're talking about 100-g networks. That means the systems can deliver Web content at 100 gigabits per second - roughly 200 times faster than what most consumers have at home these days.

All of which puts optical networking firms front and center. Then again, when it comes to raw speed, nothing beats light.

Enter Alliance Fiber Optic Products Inc. (Nasdaq: AFOP). Basically, Alliance helps make fiber-optic technology possible for homes and businesses.

These Shares Are Unstoppable

The company builds optical networking components, modules, and subsystems needed by long-haul carriers as well as those who connect what's called the "last mile" from the network to your home.

Ironically, if ever there was a dark fiber bust it was Alliance. Riding the original Internet wave, the stock traded as high as $27.65 a share in February of 2001.

Then the dot-com bust cut the legs out from under the stock. By October of 2002, AFOP shares were trading for $0.97 each.

Today, however, Alliance has become an unstoppable force on greatly improving profits and cash flow. In fact, the company has raised guidance several times this year.

That's why Alliance has gained roughly 300% over the past year and has turned in a 785% gain over the past five years.

Demand for the stock has been so intense the company recently split two-to-one - and the gains reflect the split-adjusted prices.

With a market cap of about $320 million, the stock trades at a post-split price of less than $18. Alliance has excellent financials, as well. It boasts a 24% profit margin, and a return on equity of 20.6%. It has $38 million in cash, and no debt.

Aside from the market's chaos brought on by Washington's budget battles, the main short-term risk remains possible shareholder dilution.

Later this month, the company will host a special meeting in which one of the proposals is to increase the number of authorized shares to 100 million from the current 20 million.

Let me be blunt. Yes, I see risk in more shares trading. But that will be greatly reduced by institutions snapping up shares, which I believe will be the most likely outcome. They currently hold less than one-third of the stock, and all indications are they want to own more of it.

I don't expect the firm to issue all its new shares at once, either, unless it has lined up buyers who will take them without asking for a substantial discount.

Either way, there's no denying that Alliance and other firms in the sector will continue to face explosive demand for their products as the world moves to ultra-broadband technology.

Source :

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email:

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules