Dronamraju Ravi Prakash

Despite the general weakness in the market - nasdaq down ~150 points since end of june - tech infrastructure plays have held up reasonably. I am particularly impressed with NTAP (Network Appliance) which is upto $21.89 today.

JNPR (Juniper networks) is another stock that is showing a lot of strength in the last few weeks. Even though there's been a cloud hanging over this sector since the CSCO (cisco) report, the news/rumblings coming out the JNPR camp have been very positive. First there's this report from wachovia, raising revenue/profit estimates for Juniper. Now, i am also hearing rumors of really strong Q3 from couple of my sources in the stock broker community. It may not be wise normally to rely on "hot tips" from brokers, but these brokers that i heard the news from are very reliable and i know them for a while.

The ratios look very unfriendly for JNPR though. We are looking at a forward (2005) P/E of 4o. However the PEG ratio is 0.8 (40PE vs 50% EPS growth) and they have about a 1$/share in cash. On the whole this looks more like a bet and less like an investment.

What's making me feel comfortable about Juniper networks (JNPR) though, is my belief in this sector. This pretty much a 2 player game and the sector continues to grow. I believe the growth potential is solid for another few years, especially when you see how the infrastructure needs to upgraded all over the world (europe, india, china)
My position: HOLD for another 6 months and re-evaluate.