INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.
NPTN (market cap is $0.433B was $0.425B)
Neophotonics builds and sells electro-optical components, like the switches that make streaming on the internet possible. Your computer probably works with electrical signals. The main conduits on the internet work with fiber optics. Electro-optical switches translate electrical signals into optical signals, or the opposite.
The need for such components was strong before the pandemic. The pandemic may have just proved how vital high-speed communications are for everyone. It will be interesting to see if the increased demand increases orders for Neophotonics' products.
Despite the dynamic nature of the industries managing the internet, Neophotonics has not been profitable. If their financials continue to improve, they may reach profitability soon; but I've seen other companies reach such a point then leverage themselves again attempting to grow grow grow. As an investor, I like to see a balance of at least marginal profitability, managed growth, and continued innovation. To me, a successful and sustainable business isn't just about maximizing profits, or growth, or innovation; it's about balancing all three.
I might consider buying more if spare funds are available, but I'll also check out the competitors.
DISCLOSURE LTBH but only just begun in 2017 as I switched from GigPeak's buyout and into NPTN, thinking that staying in the same industry would be a good thing. Not so far.
(I've also collected links to the other discussion boards and my other stocks over on my blog http://trimbathcreative.net/2020/06/30/semi-annual-exercise-mid-2020 )