Trade-Ideas LLC identified

Infinera

(

INFN

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Infinera as such a stock due to the following factors:

  • INFN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $47.6 million.
  • INFN has traded 421,177 shares today.
  • INFN is down 3.1% today.
  • INFN was up 5.4% yesterday.

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More details on INFN:

Infinera Corporation provides optical transport networking equipment, software, and services worldwide. INFN has a PE ratio of 24. Currently there are 4 analysts that rate Infinera a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Infinera has been 2.8 million shares per day over the past 30 days. Infinera has a market cap of $1.2 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.15 and a short float of 11% with 2.00 days to cover. Shares are down 51.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Infinera as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 1.0%. Since the same quarter one year prior, revenues rose by 24.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • INFN's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, INFN has a quick ratio of 2.10, which demonstrates the ability of the company to cover short-term liquidity needs.
  • INFINERA CORP's earnings per share declined by 38.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INFINERA CORP increased its bottom line by earning $0.36 versus $0.10 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.36).
  • Net operating cash flow has decreased to $28.22 million or 48.71% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 63.81%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 38.46% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, INFN is still more expensive than most of the other companies in its industry.

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