Ciena Corporation, Smuckers on Run

Posted: Jun 07, 2013 12:01 AM
Ciena Corporation, Smuckers on Run

Stocks in the News is produced by Ransom Notes Radio and Goodfellow, LLC. Crista Huff manages Goodfellow LLC, a website that recommends outperforming stocks using fundamental and technical analysis. 

Stock number one is: 

Proctor & Gamble Co., (SYMBOL: PG) and the headline says:

P&G Reorganizes Into Four Industry Groups Under New CEO -- Bloomberg

Proctor & Gamble Company, “will streamline its businesses into four industry-based groups as recently returned [CEO] A.G. Lafley works to reignite growth,” reports Bloomberg.  Lafley remarked, “these organization changes will help us operate better and faster.”

Competitors have been stealing P&G market share, with Unilever’s sales growth outpacing P&G’s four-fold in the past three years.  A $10 billion cost-cutting plan remains in effect through 2016.

On May 24, we told investors to stay on the sidelines due to the high PE, slow earnings growth, and neutral chart.  The stock’s still trading between $76 and $83.

Our Ransom Note trendline says:  STAY ON THE SIDELINES.

PG Chart

PG data by YCharts

Stock number two is: 

The J.M. Smucker Co., (SYMBOL: SJM) and the headline says:

Smucker Fourth Quarter Earnings Exceed, Revenues Lag -- Zacks

J.M. Smucker Company reported fourth quarter earnings of $1.29 per share, above the consensus estimate of $1.15, led by strong coffee volume and profit growth.  Revenues were down 1% year-over-year.

Earnings are projected to grow 9-11% for each of the next three years.  The dividend yield is 2.11%; and the PE is 19, in a normal range of 12 to 21.

Smucker stock rose steadily since last August, peaked in May, and is now establishing a new trading range between 98 and 105.  Shares appear fully valued at this time.

Our Ransom Note trendline says..... STAY ON THE SIDELINES.

SJM Chart

SJM data by YCharts

Stock number three is:

Ciena Corporation, (SYMBOL: CIEN) and the headline says:

Ciena beats revenue target; gives upbeat forecast -- MarketWatch

Network specialist Ciena Corporation reported record quarterly revenue of $508 million, and higher-than-expected operating margins and earnings per share, thrilling Wall Street today.  Strong spending from customers AT&T and Verizon sparked the revenue surge.

Ciena has not earned a profit since 2008, but is on track to chalk up record earnings per share in 2014 and beyond.  Caution is warranted, as the PE is 44, and the company has a very high long-term debt ratio.

The stock broke out of a trading range today.  A run-up could take the stock as high as medium-term resistance at $28.  Experienced aggressive growth investors could make money near-term.

Our Ransom Note trendline says....  CIENA CORPORATION IS A TRADING BUY.

CIEN Chart

CIEN data by YCharts