Juniper Networks, Inc. (JNPR), Aruba Networks, Inc. (ARUN), Finisar Corporation (FNSR): Three Lucrative Tech Buys for This Month

Data demand and improved margin

Juniper Networks, Inc. (NYSE:JNPR) announced its second quarter results on July 23, 2013. It reported revenue of $1.15 billion with 9% quarter-over-quarter growth. This growth will continue due to the rising Internet data demand driven by mobile Internet and cloud computing.

This data demand will trigger network service providers to upgrade their networks, leading to increased sales of networking equipment like routers and switches. This will benefit Juniper because of its strong relationships with some of the dominant U.S. wireless carriers. These service providers contribute around 63% of the company’s total revenue.

Juniper Networks, Inc. (NYSE:JNPR) reported a 18.9% operating margin for the second quarter of 2013 as compared to 15.7% in the first quarter. This margin was well above the estimated margin of 17.5%, driven by the improved gross margin from its service division. Better efficiency in customer support and service delivery improved the company’s service division margins. Juniper is also undergoing a restructuring that will lay off about 5% of its workforce. This will result in about $150 million in cost savings in 2013 as compared to 2012.

Juniper Networks, Inc. (NYSE:JNPR)’s new product T4000 router will help the company’s margin improve further with an 80% margin as compared to industry standards of 65%. All of these factors will help the company to achieve its estimated 19.5% operating margin for the third quarter of 2013.

Conclusion

Networking and communication companies will witness growth from rising trends and increased demand for networking equipment. The BYOD trend will boost Aruba Networks, Inc. (NASDAQ:ARUN)’s revenue, and the share repurchase program will improve the value for its shareholders. Finisar’s datacom and telecom segments will drive the company’s revenue in upcoming quarters. Along with improved margins, Juniper Networks, Inc. (NYSE:JNPR) will also see growth in its revenue due to increased Internet data demand. As a result, I recommend buying all three stocks.

The article 3 Lucrative Tech Buys for This Month originally appeared on Fool.com and is written by Shweta Dubey.

Shweta Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Shweta is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.