That's good, because consolidation in the telecom industry over the past 12 months has reduced the spending levels of recent merger products like the new AT&T
CEO Robert Switz made comments that point to a return to normalcy, and stressed his company's strong sales outside North America. Nearly 38% of ADC's sales happen in places like Europe and Asia these days, giving it some immunity to localized economic slumps.
So what we have here is a worldwide systems provider treading water while its target market sorts itself out. ADC was hit hard by the dot-com crash and the end of enthusiastic spending on networks without content. Now that the third world builds out communications networks and more fortunate markets catch a case of online video addiction, the networks are growing again -- and so should infrastructure builders like ADC.
The stock price may be up 47% over the last year, but it's down 93% from its bubbly peak in 2001. ADC has an impressive roster of dependable customers, including all of the biggest U.S. telecoms -- AT&T, Sprint-Nextel
In other words, there should be plenty of growth still ahead once all the consolidation shakes out, and we're a long ways off from the pie-in-the-sky valuations of old. Keep an eye on ADC, in case some short-term stumble brings about a bargain buy.