NEW YORK (TheStreet) -- Shares of Brocade Communications (BRCD) were up a staggering 21.69% to $10.58 in Monday afternoon trading, as investors reacted to a Bloomberg report that the data and storage networks company was in advanced talks to sell itself. Semiconductor company Broadcom (AVGO) is said to be a potential buyer.
"Brocade's got very strong free cash flow yield, so it's imminently financeable," Wunderlich Securities analyst Matthew Robison said Monday on CNBC's "Power Lunch." "Since they purchased Ruckus Wireless [a wi-fi networking company], they've got some industry leading wireless LAN technology, which is relatively high growth."
Despite the reported Broadcom interest, Robison told CNBC that he believes Brocade fits best in a private-equity scenario.
Shares of Broadcom were slightly higher in Monday afternoon trading.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate BROCADE COMMUNICATIONS SYS as a Buy with a ratings score of B-. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: BRCD