Trade-Ideas LLC identified

Oclaro

(

OCLR

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

  • OCLR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.0 million.
  • OCLR has traded 327,344 shares today.
  • OCLR is up 3.6% today.
  • OCLR was down 5.5% yesterday.

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More details on OCLR:

Oclaro, Inc. designs, manufactures, and markets lasers and optical components, modules, and subsystems for the optical communications, industrial, and consumer laser markets worldwide. Currently there are 6 analysts that rate Oclaro a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Oclaro has been 3.2 million shares per day over the past 30 days. Oclaro has a market cap of $589.7 million and is part of the technology sector and electronics industry. The stock has a beta of 1.54 and a short float of 28% with 7.63 days to cover. Shares are up 44.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Oclaro as a

sell

. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:

  • The gross profit margin for OCLARO INC is currently lower than what is desirable, coming in at 32.19%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, OCLR's net profit margin of 0.16% is significantly lower than the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, OCLARO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, OCLR has a quick ratio of 1.86, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 146.33% to $10.94 million when compared to the same quarter last year. In addition, OCLARO INC has also vastly surpassed the industry average cash flow growth rate of 39.53%.
  • This stock has increased by 155.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in OCLR do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

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