Brocade's (BRCD)
strong recovery rally ended on April Fool's Day, in large part due to
growing pessimism about enterprise storage demand and the resulting
demand for Brocade's fibre channel storage area network (or SAN)
switches. Add to that some ongoing pessimism regarding the company's
ability to compete in IP networking and whether there's much incremental
leverage to squeeze from the business and Brocade is back to a "show
me" story.
I continue to believe that Brocade shares are
undervalued, but the market is notoriously unkind to low-growth free
cash flow rich tech stories and the storage market is going to need a
few more quarters to sort itself out. At a minimum, I think that means
that readers considering Brocade for its potential value will need to be
patient as it works through these challenges.
Click the link to continue:
The Storage Shakeout Is Tossing Brocade Around Too
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