Tuesday, December 10, 1996
Got Fiber?
By Cbstd

Peanut-butter sandwiches used to dominate my life. Nothing was as satisfying as a good slab of creamy on white bread. As my palette matured, I came to appreciate the subtleties of a pizza loaded with pepperoni. As a college student my refrigerator was stocked with the four basic food groups: Fast, Frozen, Junk and Spoiled. Older but wiser, I now concentrate on insuring that I have enough fiber in my life.

The nutritional values of fiber in your diet are well known. If you are having trouble moving content, fiber is the remedy. And when networked communications systems need to improve their flow of content, fiber is the answer.

Fiber Optic Cables are the vital arteries that allow the unencumbered flow of data among networked systems. Not as sexy as the routers, switches and browsers that make the headlines, fiber optic cable is the roadbed of the Information Superhighway. Very basic, very boring and under appreciated.

Massive valuations have turned the networking superstar companies into P/E monsters that can scare the Foolish investor. But there is a giant of the fiber optic cable business that is quietly expanding its manufacturing capacity to meet its growing backlog of orders far from the attention of the Wise. Trading at a modest multiple of earnings while growing its profits appreciably, this company is worthy of Foolish consideration.

Fools who do their research will soon discover what company I am talking about. Explore the relative values of the largest of the fiber optic cable producers (Belden Wire and Cable, Cable Design Technologies, Lucent Technologies and Owens Corning) and draw your own conclusions where Foolish values lay. But a Fool can narrow his choices by eliminating the company with a high flying market valuation. And eliminate the company staggering from a product liability lawsuit that their medical products division incurred. And eliminate the recent spin off with no individual track record.

As for me, I have heard that a good dose of fiber can also ease a queasy stomach caused by turmoil in the market.