Opinions
Cameron Hurst
Juniper Networks
JNPR-N
WEAK BUY
May 09, 2018
$26.170
Stock price when the opinion was issued
electrical
electronic
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TOP PICK
Internet infrastructure. They are the leader in the fast-growing IP networking sector and are gaining market share. They are going to realize increase sales into 2016 from services cloud and security. Last quarter they reported an earnings surprise 31% above consensus estimates. Trading at 13X forward earnings. You are getting a 12% growth rate. Dividend yield of 1.55%.
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COMMENT
He owned Western Digital a few years ago. He still follows it, but finds there are other players, like Juniper or Cisco, who are better investments today.
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TOP PICK
Stockchase Research Editor: Michael O'Reilly JNPR is a steady producer of networking, router and cloud-computing equipment. In recent earnings its revenues were up 5% and earnings of $0.43 per share beat the market by $0.12. It trades at a forward 12 PE, a current 17 PE compared to a sector average of 21. It pays a solid dividend, backed by a 78% payout ratio. We would trade this with a $17 stop-loss, looking to achieve analyst targets near $25 -- 25% upside. Yield 4.07% (Analysts’ price target is $24.88)
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COMMENT
It got its groove back after struggling for years with weakness in China and recently with supply-chain disruption caused by Covid. They're turning things around--stabilizing their service-provider business and found new growth opportunities thanks to the 5G build-up and the demand for hardware support in cloud computing. Plus, they've made a series of software-as-a-service acquisitions which are lucrative. They reported late last month and reported mild top- and bottom-line beats but solid guidance for the current quarter. They have an analysts call Friday. Trades at 15x earnings and pays a 3.15% dividend, which should get it rolling, but it hasn't.
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PAST TOP PICK
(A Top Pick Nov 03/20, Up 41.1%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with JNPR is progressing well. We now recommend trailing up the stop (from $17) to $26. If triggered this would all but guarantee a investment return over 29%, when including the previous recommendation to cover half.
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They had a good beat on earnings and they seem to be turning the corner. The sector as a whole in the router world is critical to future growth of the internet. He would prefer to diversify his risk through an internet ETF.