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Chicago, IL- November 06, 2015 - Today, Zacks Investment Ideas feature highlights Features: Extreme Networks ( EXTR ), Digi International ( DGII ), Lantronix ( LTRX ), Brocade ( BRCD ) and NetGear ( NTGR ).
Where to Find the Hottest Tech Stocks Right Now
The computer and networking industry is inching higher towards the top of the Zacks Industry Rank. Last week the group was #5 out of 265 groupings, and this week it moved up one spot to #4.
There are 14 different stocks in the group, with 6 of them holding the coveted title of Zacks Rank #1 (Strong Buy). This is not to say that all of the 14 are soaring to the moon, in fact, four of the fourteen have seen their Zacks Rank decrease over the last week.
Positive Earnings Surprises
When I pulled up the computer networking stocks I saw something very surprising. 12 of the 14 names showed positive earnings surprises in the most recently reported quarter. Only two missed the Zacks Consensus Estimate. The beats were impressive with Extreme Networks ( EXTR ) posting a 300% positive earnings surprise.
Second on that list is Digi International ( DGII ), which beat the $0.06 Zack Consensus estimate by exactly that same amount. The company also beat on revenue expectations or what is commonly referred to as the top line. As a result, DGII moved higher by more than 8.6% in the session following the release. EXTR didn't do quite that well, as it missed on the topline and the stock only moved higher by 1.4%.
The complete list can be found at the Zacks website ( http://www.zacks.com/stocks/industry-rank/comp-networks-198 ).
Stock Sinks Despite The Beat
One of the strong buys that showed a rather large beat traded lower in the session following the report. Lantronix ( LTRX ) came in with a loss of one cent and that was six cents better than the Zacks Consensus Estimate of a loss of seven cents. That beat translates into an 85% positive earnings surprise. Revenues of $11M were just a bit higher than the rounded estimate of $10M and the stock traded lower by 3.2% in the session following the release.
Brocade ( BRCD ) posted a much small beat on bottom but missed on top. In reporting EPS of $0.23, the company topped the Zacks Consensus Estimate of $0.20 by $0.03 of 15%. The topline came in light by just $1M, and on a reported base of $552M, that is miss of less than one tenth of one percent… but a miss just the same. Investors brushed aside the miss and sent the stock higher by nearly 5.5% in the session following the release.
Back-to-Back Big Moves
NetGear ( NTGR ) is the same company that I penned a " Bear of the Day " article back in June of this year. I was rather upset that a router would simply stop working after less than a year and was forced to buy a new one while on vacation.
So how did that Bear of the day turn out? Well on July 23, about a month after the article was published NTGR reported EPS of $0.21, $0.02 lower than the Zacks Consensus Estimate. The company did post a nice beat of 3.5% on the top line, but Wall Street loved the quarter and sent the stock soaring 17% in the session following the release.
Why the big move up? Well the company guided the next quarter's sales to $315M to $330M when the consensus was just a bit over $300M. That helped, what also drove a heck of a lot of buying was the 3M share buyback. That represents 9.3% of the shares outstanding, so that has a way of beating back the bears.
The most recent quarter was a strong one. The company reported $0.58 when the Zacks Consensus Estimate was calling for $0.46. That is a 12 cent beat or a 26% positive earnings surprise. Revenues came in at $342M, $22M ahead of the Zacks Consensus Estimate for revenue and investors loved it. NTGR soared more than 30% on October 23, one day after the report.
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EXTREME NETWRKS (EXTR): Free Stock Analysis Report
DIGI INTL INC (DGII): Free Stock Analysis Report
LANTRONIX INC (LTRX): Free Stock Analysis Report
BROCADE COMM SY (BRCD): Free Stock Analysis Report
NETGEAR INC (NTGR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
