Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

A Beaten Down Stock That You Should Not Miss: Finisar Corporation (FNSR), Cisco Systems, Inc (CSCO), Ciena Corporation (CIEN)

I was expecting fiber optics component supplier Finisar Corporation (NASDAQ:FNSR) to lift the pall of gloom surrounding the optical networking industry, but that honor instead went to Ciena Corporation (NASDAQ:CIEN). Ciena Corporation (NASDAQ:CIEN)’s latest results put fears of a tepid telecom spending environment to rest, and this rubbed off onto the others in the industry.

Ciena Corporation (NASDAQ:CIEN) surprised the Street by posting a profit, and its guidance for the ongoing quarter rounded off a solid earnings report. The company’s expectation of $465 million to $495 million in revenue for the current quarter is in line with consensus estimates at mid-point. This indicates that Ciena Corporation (NASDAQ:CIEN)’s business is witnessing strength, and it won’t be surprising if it continues to get better.

Finisar Corporation (NASDAQ:FNSR)But when Finisar’s turn came to report earnings, the stock was given a cold reception and fell more than 8%. So, what did Finisar Corporation (NASDAQ:FNSR) do wrong? Well, nothing as such. Finisar’s revenue matched Street estimates, while earnings trumped expectations by a penny.

Some nitpicking

A solid quarter was accompanied by a decent outlook. Finisar Corporation (NASDAQ:FNSR) expects revenue of $235 million to $250 million in the ongoing quarter, while earnings are expected to be in the $0.15-$0.19 range. This is slightly better than the Street’s projection of $241 million in revenue and $0.16 in earnings, at mid-point.

However, some analysts, such as Simon Leopold of Raymond James, aren’t too sure of the company’s telecom side of the business. Leopold says that Finisar’s “higher outlook doesn’t justify meaningful appreciation,” apart from listing a number of headwinds that might affect its performance. Opinions such as these perpetrated a drop in the stock price, but I believe investors should be jumping at this opportunity. Let’s see why.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.