Ciena Corporation (CIEN) Proves That Myopia Doesn’t Deserve a Place in Investing: AT&T Inc. (T), JDS Uniphase Corp (JDSU)

Page 1 of 2

If you want to see some real life, zero-turns-hero instances, look no further than the stock markets. Just six months back, analysts were critical of communications equipment maker Ciena Corporation (NASDAQ:CIEN), slapping the stock with rating downgrades. Even myopic investors had joined them then, after the stock missed estimates and panic selling shaved 20% off its market capitalization. But, Ciena’s business is such that it would ultimately do well, even though it might witness short-term pain.

Ciena (CIEN)Thus, I knew that value investors would have jumped onto the stock after that sell-off in September and they are now sitting on gains of almost 30%. Ciena Corporation (NASDAQ:CIEN) has made a heroic comeback since, outsmarting the army of analysts who were expecting it to post a loss in the recently-reported first quarter, and soaring more than 17% in the wake of terrific results as Fool analyst Brian D. Pacampara pointed out. And unsurprisingly, there’s a lot of optimism around the stock.

Why Ciena was never in trouble

As Brian pointed out in his article, there were concerns about Ciena’s business being hit due to tepid demand, and this had kept the stock subdued this year before it busted those myths in its latest report. How could’ve the Street expected Ciena Corporation (NASDAQ:CIEN) to slowdown this year is a mystery to me, since there have been some concrete indications in the past few months that the stock should have another successful year.

When telco giant AT&T Inc. (NYSE:T) sounded out is intention of stepping on the gas to roll out faster networks aggressively, Ciena’s prospects had brightened up since Ma Bell is a 10%-plus customer. AT&T intends to provide LTE coverage to 300 million customers by the end of next year, and the company would be investing $14 billion over three years to upgrade its wireless and wireline networks. Moreover, AT&T Inc. (NYSE:T) expects total capex to be $22 billion a year for the next three years, which is great news for Ciena Corporation (NASDAQ:CIEN).

And finally, when optical networker JDS Uniphase Corp (NASDAQ:JDSU) came out with a stunning quarterly report earlier this year, it became clear that networking stocks are in for a good time. Uniphase’s strong execution, product development moves, and an upswing in capital spending by telecom companies led management to forecast a better year. Ciena’s results and outlook further prove that the recovery is not baseless, and this is the reason why optical networking stocks, including JDS Uniphase Corp (NASDAQ:JDSU), should have a good time.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!