Optical telecom equipment maker Ciena (CIEN) has pulled back, and it's time to consider buying the dip.
"Wait
for a pullback" and "buy on a dip" are some of the most hackneyed
pieces of investment advice out there, and there's often an important
detail missing. While it often does make a great deal of sense to buy
good stocks on a momentary setback, what investors are seldom reminded
of is that buying on these occasions often requires a lot of fortitude.
After all, there's usually some near-term reason why the shares are
trading down and climbing aboard a stock just as it is careering off a
cliff is an experience that sticks with you.
Ciena has certainly
seen the pace of sales growth and margin improvements slacken, but I
believe this will prove to be a pause that refreshes. There still seem
to be long-term legs to the equipment/network upgrade cycle, and Ciena
has reemerged as a share gainer in the space. Investors can't ignore the
risk that 2014 sees sales growth slow after the double-digit growth in
fiscal 2013, but the valuation here is appealing.
Read more here:
Ciena Isn't Done Yet
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