Infinera - A new position

Investment Analysis Clubs Saul’s Investing Discussions
21

Hi Neil

Sorry, on the technology comparison I am not going to elaborate. It would expose ways we compete.

The application was long haul connectivity between datacenters.

Just want to reiterate my point…there will be several winners in this optical cycle of refreshing existing networks and deploying new networks. INFN will be one of them. Customers do really like their products, they have great technology, and the expansion of their services organization will also help.

But they do not own this space which some may believe is the case when reading all the posts.

Now, I need to look at valuation again and see what that really looks like ;-).

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22

Schwab’s research gives INFN and its ‘peers’ C ratings (CIEN, FNSR, PLT, VSAT, JDSU).

Something wrong with the sector?

No, something is wrong with Schwab’s ratings. I have outperformed S&P in 5 of of last 6 years. Schwab rates the majority of my stocks between C & F. It gives me two A’s I think, but those perform far below the majority of my C through F stocks. I check their ratings occasionally just for fun, but in general disregard them as not useful to me.

okapimoon

1 Like
23

Hi Sano

Well let’s see: Looking at my stocks, Schwab rated:

D – AMBA, BOFI, SNCR
C – EPAM, INFN, SKX, SWKS, WAB
B – CELG
A - None

They didn’t rate the others. I don’t know what the heck they are rating, but apparently it has nothing to do with how well the company is doing or how well the stock does. Maybe you have to be really, REALLY, mediocre to get a good rating.

IBD ratings. First IBD Top 50 with is a list of fundamentally good grwoth stocks, but really ranked by relative strength, so not to be given too much credit. Their comments in parenthesis
AMBA#1 (extended after successful test of 10 week moving average)
SWKS#2 (in buying range from 102.87 buy point of flat base)
EPAM#11 (Extended but forming new base with possible buy point of 70.59)
CRTO#14 (more than 5% above buy point in cup shaped base)
no other on the RS list.

SWKS and EPAM in “Sector leaders” which highlight great growth stocks not too far from a “buy point”.

Yes, I know charts are irrelevant here :wink:

IBD’s primary aid is ranking a growth stocks fundamentals. 99 means it is in the top 99% of the stocks they follow (which is a large amount). They provide lots of detail on previous EPS and Sales growth and expected growth.

(Comp rating, a combo of several items)
ticket…COMP…EPS…RS…
AMBA…99…99…99
SKWS…99…99…98
EPAM…98…95…95
CRTO…97…98…92
CELG…99…97…81
SKX…99…75…98
WAB…94…93…83
BOFI
SNCR
INBK
(could not find the last 3 because the paper groups them by sectors instead of alphabetically and they only list the top 30 or so sectors.)

An article in 5/26 edition with headline
stocks with wide profit margins have big potential for success
On the list: AMBA, SWKS,

CYBR (which is one of my strong holdings this board should consider)

IBD also pays attention to accumulation/distribution numbers to help judge if the big boys are buying or selling over time.

At any rate, they seem better than Schwab.

1 Like
24

Hi PuddinHead, Thanks for posting that information on IBD. Do you have to be a subscriber to access all that? I noticed you din’t post any links. If you subscribe, do you feel it’s a worthwhile subscription?
Thanks
Saul

25

CYBR (which is one of my strong holdings this board should consider)

Hi again Pudding Head, Why don’t you tell us about CYBR?
Saul

26

Yes, you have to be a subscriber. Right now I am too cheap to subscribe but have done some free trails. The website is useful for that kind of data if you subscribe. Also, they have premium products, like charting tools that include all the vitals and allow annotation.

I have been receiving my neighbor’s used papers for years and review them on the weekend, thus my difficulty in finding all stocks on the list in the previous thread. They focus on growth stocks, which would interest you. You seem to be doing pretty darn good, but it might be another resource like your SA subscriptions. You might try a two week trial at Investors.com.

There is a column called “New America” where they highlight young growth companies once a week. There is a good overlap with what I see with my Stock Advisor subscription. I suspect more overlap if you include RB and HG. I always suspect the G brothers must look at that for ideas too - who knows.

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27

Saul,

(I’m taking a first crack at generating the numbers on my own, from the filings.)

I’ve pulled the 10 K/Q filings and am pulling numbers together. I get different numbers (in bold below) from what your getting.

Here’s what I’m getting (using just the straight numbers from the filing):

Earnings:
2013: -13 -9 03 -8
2014: -4 04 04 07
2015: 10

Also, my 2013 revenues for q3 & q4 is 121 and 160 (still totaling 281).

Thanks for any help clearing this up.
-Dave

Here are the adjusted earnings for the past few years. You can see how they picked up in 2014. But please don’t buy based on this. This is a tough industry, with lots of competition. Please read more about the company first.

2013: -6 -1 10 00 = 03
2014: 03 11 11 13 = 38
2015: 16

Revenues have been:
2013: 125 138 142 139 = 544
2014: 143 165 174 186 = 668
2015: 187

And adjusted operating margin %:
2013: xx xx 9.9 0.8 = 1.4% for the year
2014: 3.9 8.6 8.6 11.0 = 8.3% for the year
2015: 12.2

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28

I’ve pulled the 10 K/Q filings and am pulling numbers together. I get different numbers (in bold below) from what your getting.

Dave, you’re probably looking at GAAP numbers. Saul is looking at adjusted (non-GAAP) numbers. Usually the easiest way to gather the adjusted numbers is to just cruise through the company’s earnings press releases – it takes maybe 5 minutes to gather up a few years’ worth.

Neil

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