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Applied Optoelectronics, Inc. (NASDAQ:AAOI) Completes the Turn

Applied Optoelectronics, Inc. (NASDAQ:AAOI)

Applied Optoelectronics, Inc. (NASDAQ:AAOI) started out as a manufacturer and supplier of products to the cable television market. In 2013 the company took a deliberate turn to transform itself into a producer of products that market to data centers. Any time a company makes a strategic turn there is risk, but it appears that three years later the results are in – and Applied Optoelectronics came out a winner.

In 2014 Applied Optoelectronics, Inc. (NASDAQ:AAOI) reported total revenue growth at 66% over 2013 revenues and attributed that growth to their rapid expansion into the data center optical market. That growth was impressive enough to get the firm the 374th spot in the Deloitte’s 2014 Technology Fast 500. The growth continued in 2015 as Total Revenues grew 46% and GAAP Net Income more than doubled the 2014 figure.

Yesterday Applied Optoelectronics, Inc. (NASDAQ:AAOI) posted their full-year 2016 results. They did not disappoint – again. The Sugarland, TX company reported 2016 revenues up 37% over 2015. GAAP net income increased to $31.2 million, or $1.76 per diluted share, compared with net income of $10.8 million, or $0.65 per diluted share in 2015.

While AAOI shares gained less than 1% during Thursday’s regular session, the market responded to the earnings release by sending AAOI up over 12% in after-market trading to their highest-ever levels ($42.20) on moderate volumes. The growth in the stock has been jaw-dropping for a $600 million company. AAOI threatened to break below $8 in May of 2016 and today is sitting above $40, that is 500% growth in 1.5 years in a highly competitive industry that includes investor darlings such as Lumentum (LITE), Oclaro (OCLR), and ARRIS International (ARRS).

Throughout the transformation, one man remained at the helm. Dr. Thompson Lin is the founder, CEO, and Chairman of the Board of Applied Optoelectronics, Inc. (NASDAQ:AAOI). He founded the firm in 1997 after receiving a Ph.D. in Electrical Engineering from the University of Missouri. Dr. Lin has been awarded over ten patents and has authored over 200 technical papers. While those are impressive achievements, there is little doubt that his greatest achievement has been the skilled stewardship of Applied Optoelectronics, Inc. (NASDAQ:AAOI) through a highly competitive global market.

2/23/2017
Ticker Symbol AAOI
Last Price a/o 7:59 PM EST  $                    41.80
Average Volume                    511,380
Market Cap (mlns)  $                  619.00
Sales (mlns) $228.80
Shares Outstanding (mlns) 16.52
Share Float (mlns) 16.35
Shortable Yes
Optionable Yes
Inside Ownership 2.40%
Short Float 12.75%
Short Interest Ratio 4.08
Quarterly Return 42.96%
YTD Return 59.85%
Year Return 134.65%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 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.

 

Infinera Corp. (Nasdaq: INFN) Beats Expectations and Shares Surge

Infinera Corporation – Nasdaq: INFN

Infinera Corporation (Nasdaq: INFN) is up today on better than expected results released last night. Infinera Corporation (Nasdaq: INFN) reported Q4 revenues of $181 million – a drop from $360 million from the comparable quarter last year, but better than the expected $175.4 million. Shares of INFN lost $0.12 EPS but that was $0.01 better than street estimates. Infinera Corporation (Nasdaq: INFN) quarterly net income was a net loss of $17 million. Despite worse year-on-year performance, the results were better than expected and INFN shares were upgraded by two industry analysts.

Infinera Corporation (Nasdaq: INFN) provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations. Infinera Corporation’s end-to-end packet-optical portfolio is designed for long-haul, subsea, data center interconnect and metro applications. Infinera Corporation’s photonic integrated circuits enable optical networking solutions. Its competitors include Lumentum Holdings ($LITE), Finisar ($FNSR), Ciena ($CIEN), and Oclaro ($OCLR).

As recently as August, INFN shares had been rated as a “Strong Sell” by some despite impressive historical performance. EPS had steadily improved from a $0.78 loss in 2011 to a $0.39 profit in 2015. Infinera Corporation (Nasdaq: INFN) sales showed similar upward trends – $sales of $404.9 million in 2011 and $886.7 million in 2015.

As of this writing, four firms rate INFN shares as a “Strong Buy”, and ten rate the shares as a “Hold”. Their consensus price target is $9 – almost $3 less than where INFN is currently trading.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

2/10/2017
Ticker Symbol INFN
Last Price a/o 11:40 AM EST  $                    12.02
Average Volume                1,650,000
Market Cap (mlns)  $              1,350.00
Sales (mlns) $949.00
Shares Outstanding (mlns) 143.85
Share Float (mlns) 141.76
Shortable Yes
Optionable Yes
Inside Ownership 0.20%
Short Float 7.63%
Short Interest Ratio 6.55
Quarterly Return 18.99%
YTD Return 10.72%
Year Return -31.93%

Oclaro, Inc. (Nasdaq: OCLR) Announces Preliminary Results – Shares Climb

Oclaro, Inc. – Nasdaq: OCLR

Oclaro, Inc. announced preliminary financial results after the market closed and shares are up over 8% on heavy volume. The San Jose, CA-based firm announced revenues at $153.5 – $154 million on prior guidance of $146 – $$154 million with gross margins of 40% versus prior guidance between 33% and 36%.

CEO Greg Dougherty commented in a press release – “Our excellent preliminary results for the December quarter once again demonstrated the strength of Oclaro’s products in the markets we serve. We expect revenue to come in at the high end of guidance as 100G and beyond sales again exhibited excellent growth.  In addition, we expect the quarterly results to reflect record levels of gross margin and operating income and exceed our prior guidance.  Our performance was driven by strong execution, a richer product mix, and favorable foreign exchange rates.”

Oclaro, Inc. develops optical components, modules, and subsystems for optical transport and metro networks, enterprise networks, and data centers. They trade on the Nasdaq under ticker OCLR. Ten firms follow Oclaro. Nine have rated OCLR shares as a “Strong Buy” and one rates OCLR as a “Hold”. The consensus price target is $11.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

1/18/2017
Ticker Symbol OCLR
Last Price a/o 5:25 PM EST  $                      8.84
Average Volume 5.36 million
Market Cap $1.36 Billion
Sales $455.9 million
Shares Outstanding 167.48 million
Share Float 157 million
Shortable Yes
Optionable Yes
Inside Ownership 2.90%
Short Float 10.17%
Short Interest Ratio 2.98
Quarterly Return 3.70%
YTD Return -9.16%
Year Return 135.65%

Our Picks for 2016 – If We Had a Time Machine

As we say goodbye to 2016, let’s take a look at some of the best performing Nasdaq small cap performances. The stocks below are our choices for what we would have bought if we could just borrow someone’s time machine. If you happen to have one, we promise that we will return it in better shape than we got it!

  1. Corbus Pharmaceuticals Holdings, Inc. (Nasdaq: CRBP) – This biotechnology firm leads our list with a whopping return of excess of 425% for 2016. Four analysts cover CRBP – all rate it “Strong Buy”. Consensus price target is $18.
  2. Oclaro, Inc. (Nasdaq: OCLR) – OCLR manufactures optical oriented internet infrastructure equipment. YTD returns are over 170%. Ten analysts cover OCLR – nine rate it as a “Strong Buy” while one rates it as a “Hold”. Consensus price target is $12.
  3. Hudson Technologies Inc. (Nasdaq: HDSB) – Hudson Technologies specializes in refrigeration. Cold must be good business – HDSN is up almost 175% YTD. All three analysts that cover the stock give it a “Strong Buy”. Consensus price target is $9.50.
  4. Energous Corporation (Nasdaq: WATT) – Energous develops wireless charging technology. Investors seem to like the idea as WATT is up over 130% YTD. All three analysts that cover WATT give it a “Strong Buy”. Consensus price target is $15.50.
  5. TTM Technologies Inc. (Nasdaq:TTMI) – TTM Technologies designs and manufactures circuit boards. It may not sound sexy, but investors loved TTMI in 2016 – sending it up almost 120%. Three analysts cover TTMI – two rate it “Strong Buy” and one rates it a “Buy”. Consensus price target is $15.00.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Oclaro, Inc (Nasdaq: OCLR) Shares Propelled by Acquisition Rumors

Oclaro Inc., Nasdaq: OCLR

Shares of San Jose, CA-based Oclaro Inc. are higher on rumors of an acquisition by Finisar Corporation (Nasdaq: FNSR). Shares of Oclaro Inc. trade on the Nasdaq under ticker symbol OCLR.

Oclaro Inc. develops and provides products for fast optical networks and high-speed interconnects that are enabling the next wave of streaming video, cloud computing, voice over IP and other high-speed and bandwidth-intensive applications. Oclaro operates R&D and chip fabrication facilities in the U.S., U.K., Italy, and Japan; in-house and contract manufacturing sites in China, Malaysia, and Thailand; and design, sales, and service organizations in each of the major regions around the world.

Oclaro’s financials are impressive. From their November 1, 2016 press release:

Results for the First Quarter of Fiscal 2017

  • Revenues were $135.5 million for the first quarter of fiscal 2017, and compare with revenues of $125.2 million in the fourth quarter of fiscal 2016, which was a 14 week quarter, and revenues of $87.6 million in the first quarter of fiscal 2016.
  • GAAP gross margin was 34.2% for the first quarter of fiscal 2017, compared with GAAP gross margin of 32.1% in the fourth quarter of fiscal 2016, and a GAAP gross margin of 25.9% in the first quarter of fiscal 2016.
  • Adjusted EBITDA was $25.6 million for the first quarter of fiscal 2017, compared with Adjusted EBITDA of $19.2 million in the fourth quarter of fiscal 2016, and Adjusted EBITDA of $4.2 million in the first quarter of fiscal 2016.
  • Cash, cash equivalents, and restricted cash were $229.3 million at October 1, 2016.

Nine analysts have OCLR ranked as a “Strong Buy” and one has it rated as a “Buy”. Price target consensus for OCLR is $12 however rumors peg the takeover price at $13. Investors should be aware that all 2016 insider transactions were sales – no management acquired shares of OCLR in 2016.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

Ticker Symbol OCLR
Last Price a/o 8:00 AM EST  $               9.40
Average Volume 5.19 million
Market Cap $1.43 Billion
Sales $456 million
Shares Outstanding 154.95 million
Share Float 154.95 million
Shortable Yes
Optionable Yes
Inside Ownership 2.90%
Short Float 8.38%
Short Interest Ratio 2.5
Quarterly Return 1.43%
YTD Return 165.23%
Year Return 166.76%