Juniper Networks (JNPR) Falls Further As It's Water-Logged And Getting Wetter

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 Juniper Networks ( JNPR) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Juniper Networks as such a stock due to the following factors:

  • JNPR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $158.9 million.
  • JNPR has traded 6.3 million shares today.
  • JNPR traded in a range 238.9% of the normal price range with a price range of $1.44.
  • JNPR traded below its daily resistance level (quality: 13 days, meaning that the stock is crossing a resistance level set by the last 13 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on JNPR:

Juniper Networks, Inc. designs, develops, and sells products and services for high-performance networks worldwide. The company operates in two segments, Platform Systems Division and Software Solutions Division. The stock currently has a dividend yield of 1.8%. JNPR has a PE ratio of 18.1. Currently there are 10 analysts that rate Juniper Networks a buy, no analysts rate it a sell, and 15 rate it a hold.

The average volume for Juniper Networks has been 6.4 million shares per day over the past 30 days. Juniper has a market cap of $9.9 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.03 and a short float of 1.2% with 0.70 days to cover. Shares are down 4.7% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Juniper Networks as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • JUNIPER NETWORKS INC has improved earnings per share by 21.1% 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. During the past fiscal year, JUNIPER NETWORKS INC increased its bottom line by earning $0.86 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $0.86).
  • Although JNPR's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average. To add to this, JNPR has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for JUNIPER NETWORKS INC is rather high; currently it is at 68.22%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, JNPR's net profit margin of 9.20% significantly trails the industry average.

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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