•China. Chinese fiber-optic-cable demand has grown about 20% a year the past few years, Mack says, but will slow to about 15% this year because China has already built much of its city-to-city backbone. Still, the Chinese will use a great deal of cable as they prepare for the 2008 Summer Olympics in Beijing.
•India. India is still building its Internet backbone, and demand for fiber-optic cable should grow about 20% a year, Mack says.
The biggest player in the fiber-optic-cable business is Corning. glw And it's a favorite among those who are bullish on fiber stocks. "Our biggest play there is Corning," says Kevin Landis, manager of Firsthand Technology Value fund.
Landis figures that Corning will benefit from the push to hook up households via optical fiber. He also thinks Corning will benefit from international growth. "Even though WorldCom deployed too much fiber across the Great Plains, that doesn't help China any."
Corning's stock performance hasn't lived up to its potential: It's up just 3.3% the past 12 months. Daniel Scalzi, CEO of Matrix USA, a Wall Street research firm, thinks the company has to shore up its balance sheet: "When you look at its profit margin and valuation, it doesn't work for us. They're spending a lot of money to make not enough money. That said, they're in a great business."
Ken Croft, manager of Croft-Leominster Value, suggests Cisco, which makes much of the equipment necessary for fiber-optic telecom. The stock has soared 40.8% over the past 12 months. But it isn't cheap: The stock is selling for 21.8 times its 2009 estimated earnings. (The price-earnings ratio tells you how expensive a stock is, relative to earnings. Lower is better.)
Another suggestion: General Cable, bgc which makes copper as well as fiber-optic cable. The stock has soared nearly 80% the past 12 months, and it sells for about 16 times its 2008 estimated earnings. But it's volatile: It's fallen about 15% the past three months.
A final possibility: Sumitomo Electric, a Japanese company with a fiber-optic-cable division.