Zacks Investment Ideas feature highlights: Extreme Networks, Digi International, Lantronix, Brocade and NetGear

A person taking notes from their tablet Credit: Shutterstock photo

For Immediate Release

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 ( ).

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.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today . Find out What is happening in the stock market today on

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

To read this article on click here.

Zacks Investment Research

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.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.