Wednesday, August 5, 2020

Buying Ciena (CIEN) @ $59.92

This is another 5G play.
Ciena manufactures optical fiber networks that are a necessity for 5G networks. Network operators need to build out physical infrastructure to support the high-speed 5G radio signals that get delivered to customers. That means fiber optic line and network switches, as well as modern and more flexible software-defined networking management. As mobility has grown, Ciena has also slowly but steadily grown over the years. But new 5G standards could provide a big bump higher. 
The company announced a range of 5G solutions earlier this year, such as 5G-optimized routers, 5G network automation software, and transport networks to hook up cell sites with each other and the core network, as well as to data centers.
Clients include:
- Ciena controls nearly 25% of the optical network hardware market, and has consistently increased it's market share over the years.
- Valuation seems attractive P/E ratio of 26 compared to the five year average multiple of nearly 56.

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