Today's Dead Cat Bounce Stock Is Ciena (CIEN)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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

  • CIEN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $82.2 million.
  • CIEN has traded 356,060 shares today.
  • CIEN is up 3.4% today.
  • CIEN was down 9.5% yesterday.

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More details on CIEN:

Ciena Corporation provides communications networking equipment, software, and services that support the transport, switching, aggregation, and management of voice, video, and data traffic worldwide. Currently there are 13 analysts that rate Ciena a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Ciena has been 2.7 million shares per day over the past 30 days. Ciena has a market cap of $2.1 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.62 and a short float of 30.3% with 4.23 days to cover. Shares are down 14.5% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ciena as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 10.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CIENA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CIENA CORP continued to lose money by earning -$0.84 versus -$1.46 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus -$0.84).
  • 44.91% is the gross profit margin for CIENA CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -1.81% is in-line with the industry average.
  • In its most recent trading session, CIEN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Net operating cash flow has significantly decreased to $1.99 million or 95.56% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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