Ciena (CIEN) Is Today's Strong On High Volume Stock

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 strong on high relative volume 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 $91.9 million.
  • CIEN has traded 628,360 shares today.
  • CIEN is trading at 4.91 times the normal volume for the stock at this time of day.
  • CIEN is trading at a new high 3.01% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 14 analysts that rate Ciena a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ciena has been 3.6 million shares per day over the past 30 days. Ciena has a market cap of $1.9 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 1.84 and a short float of 28.7% with 4.23 days to cover. Shares are down 24.5% year-to-date as of the close of trading on Tuesday.

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, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • CIEN's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 1979.66% to $73.85 million when compared to the same quarter last year. In addition, CIENA CORP has also vastly surpassed the industry average cash flow growth rate of -32.12%.
  • CIENA CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CIENA CORP continued to lose money by earning -$0.39 versus -$0.84 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus -$0.39).
  • The share price of CIENA CORP has not done very well: it is down 20.79% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 213.4% when compared to the same quarter one year ago, falling from -$9.80 million to -$30.70 million.

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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