Editor's Note: This column originally ran on Dec. 9, as an alert to subscribers of Stocks Under $10

On

Wednesday we offered a list of five low-priced stocks that we believe have the potential to make big moves between now and the end of the year. Another notable low-dollar stock, telecommunications equipment play

Ciena

(CIEN) - Get Report

, is on the move, and we want to share with you what has changed for this down-and-out optical transport play, and why we think it should be added to that list even after making a 10% move higher to $2.77 a share in Thursday's trading.

Thursday morning Ciena announced better-than-expected fourth-quarter results, with its loss of 6 cents per share beating the Street consensus by a penny. In addition, first-quarter sales guidance of $87.7 million to $90.2 million is well ahead of the forecasts' $81.6 million estimate. In its earnings release, Ciena CEO Gary Smith said that in the short term, he expects customer spending patters to drive revenue growth 7%-10% higher sequentially in the first quarter.

The strong quarter, combined with the company's solid balance sheet that can weather short-term capital-spending lumpiness, gives us the confidence to back this volatile stock, which we would normally let go by the boards. (We aren't adding the stock to our portfolio because we are fully invested right now, but we will keep it on our screen for the time being.) At the end of October, Ciena had close to $1 billion in cash and short-term investments and a book value of more than $3 a share. In other words, you are getting a potential double-digit top-line grower for less than its break-up value. In addition, the company is reducing operating costs, and its gross margins are rising, reaching 29.5% in the quarter from 24.9% last quarter.

It's been a rocky ride down this year for Ciena. The stock traded as high as $7.97 a share back in January, but a couple of quarterly hiccups turned the Street negative on Ciena in a hurry, and the stock hit a low of $1.67 as recently as August.

There has been talk that Ciena could be a takeover candidate with its low valuation, but the company is still integrating a lot of different acquisitions, and this makes the potential takeover scenario less likely. The Street hates this stock with a passion, but one or two good numbers should push it back toward $5 a share, or 1.5 times its book value.

Yesterday was one good number, but we would expect the move higher to fade when some of the 27 analysts who have hold or sell ratings on Ciena remind the Street how bad they think this company is.

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However, one more good number could force a lot of peoples' hands, and we believe a stake in Ciena here represents a lottery ticket that has better odds than recent speculative movers like

Genta

(GNTA)

or

CMGI

(CMGI)

.

P.S. Remember, stocks priced under $10 have the potential to move quickly. So, you might want to get our current recommendations now with a

free trial

to TheStreet.com Stocks Under $10.

William Gabrielski is a research associate at TheStreet.com and is accredited with a Series 7 license. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Gabrielski welcomes your feedback and invites you to send your comments to

william.gabrielski@thestreet.com.

Interested in more writings from William Gabrielski? Check out Stocks Under $10. For more information,

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David Peltier is a research associate at TheStreet.com In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier welcomes your feedback and invites you to send your comments to

david.peltier@thestreet.com.