Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Advanced Photonix A High-Risk Optoelectric Play

Microcap optoelectronic components company Advanced Photonix (NYSEMKT:API) hasn't had the easiest time of it, with supply issues interfering with its telecom business and frustratingly slow progress with the company's terahertz product platform. A recent equity offering has bought the company a little more breathing room and management is looking for 20% growth in the next fiscal year, helped by a strong recovery in telecom. The optoelectronics market is very competitive and customers constantly push for lower prices, but internal cost reductions, a ramp up in Chinese telecom spending, and increased fiber to the home bandwidth requirements could support better results.

Before going further, investors need to appreciate the above-average risks of a stock like Advanced Photonix. The company...

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