Oclaro, Inc. (NASDAQ:OCLR)
Shares of Oclaro, Inc. (NASDAQ:OCLR) gained over 10% in today’s trading on heavy volumes. Oclaro provides solutions for optical networks and is based in Sa Jose, CA. OCLR shares closed Friday at $8.50 and gapped up to open today’s trading at $8.88. Most of the gain took place in the first half-hour of trading and, before noon and 3 PMEST, OCLR shares hit resistance at $9.40 before ending the day at $9.36. Today’s volume was over 16.6 million – about 5 million above the 30-day, daily average.
There is reason to believe more upside exists. Oclaro, Inc. (NASDAQ:OCLR) shares are up over 114% for the year but still below their 52-week high of $11.30. Analysts have given OCLR shares a target price of $12 but its Relative Strength Index (RSI) stands at just 59 – a number that neither indicates an “oversold” or “overbought” condition.
Last week, Oclaro, Inc. (NASDAQ:OCLR) won Light Reading’s 2017 Leading Lights Award for the industry’s “Outstanding Components Vendor.” This award is given to the components vendor that stands out from its competitors, innovates constantly, helps set the industry trends, makes investors proud, and makes employees happy. Strangely though, OCLR dropped for three days after that announcement before today’s upward move.
A possible catalyst for today’s up move may have been the pronouncement of several analysts that China’s mobile sector is poised for more growth. Indeed, Oclaro, Inc. (NASDAQ:OCLR) competitors such as Applied Optoelectronics (NASDAQ:AAOI), Finisar (NASDAQ:FNSR), and Lumentum (NASDAQ (LITE) all saw their shares move higher on larger than normal volumes.
Earlier this month, Oclaro, Inc. (NASDAQ:OCLR) management had provided Q4 2017 guidance. Revenues are projected to come in between $144 – $152 million with non-GAAP gross margin between 38% and 41%. They also expect non-GAAP operating income to come in between $27 and $31 million.
Nine firms follow Oclaro, Inc. (NASDAQ:OCLR). All nine rate OCLR shares as a “Strong Buy”.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.
About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.