Brocade Communications Systems Inc (BRCD): Today's Featured Computer Hardware Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Brocade Communications Systems ( BRCD) pushed the Computer Hardware industry lower today making it today's featured Computer Hardware laggard. The industry as a whole closed the day up 0.1%. By the end of trading, Brocade Communications Systems fell $0.20 (-3.5%) to $5.54 on heavy volume. Throughout the day, 15,449,174 shares of Brocade Communications Systems exchanged hands as compared to its average daily volume of 6,287,800 shares. The stock ranged in price between $5.42-$5.63 after having opened the day at $5.50 as compared to the previous trading day's close of $5.74. Other companies within the Computer Hardware industry that declined today were: Aruba Networks ( ARUN), down 25.6%, OCZ Technology Group ( OCZ), down 9.9%, Interphase ( INPH), down 4.6% and Immersion Corporation ( IMMR), down 3.8%.
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Brocade Communications Systems, Inc. engages in the supply of Internet protocol based Ethernet networking solutions and storage area networking (SAN) solutions to businesses and organizations worldwide. Brocade Communications Systems has a market cap of $2.5 billion and is part of the technology sector. The company has a P/E ratio of 23.4, above the S&P 500 P/E ratio of 17.7. Shares are up 5.4% year to date as of the close of trading on Thursday. Currently there are 4 analysts that rate Brocade Communications Systems a buy, 1 analyst rates it a sell, and 14 rate it a hold.

TheStreet Ratings rates Brocade Communications Systems as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, Overland Storage ( OVRL), down 7.3%, Hauppauge Digital ( HAUP), down 6.5%, XRS ( XRSC), down 5.3% and Palo Alto Networks ( PANW), down 4.3% , were all gainers within the computer hardware industry with International Business Machines ( IBM) being today's featured computer hardware industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the computer hardware industry could consider iShares Dow Jones US Technology ( IYW) while those bearish on the computer hardware industry could consider ProShares Ultra Short Semiconductor ( SSG).

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