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Daily Observations



Where are we?
During these volatile times, it’s tough to admit that we don’t know what’s going to happen.  Not too long ago, stocks would jump right after a quarterly earnings increase as the Fed, led by Janet Yellen at that time, was very cautious about raising rates due to quantitative easing.  Fast-forward to today’s market and it’s difficult for a tyro trader to realize how far we’ve come as a growing economy.  On the flip side, the youth lack an appropriate amount of regret avoidance, where they almost affirm that almost no one ever fails in the stock market.
 
The fundamentals of behavioral finance are not so rosy.  Despite the possibility that someone could beat the market, not everyone can beat the market due to the fact that we are the market.  The level of critical thinking that took place to study and “learn from” the Financial Crisis of 2008 seems to come back in waves.   It is up to each of us to discern a level of appropriate optimism and to always seek out “lucky” opportunities in the financial markets.  Thus, there is one financial security in the technology sector I would like to share that possess healthy yearly charts, as well as a few positive key ratios to sustain growth during volatile times.

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Why You Should BUY CIENA CORPORATION

​Ciena Corporation develops and markets communications network platforms, software, and offers professional services.  The firm operates in three segments: networking platforms, global services, and software and software-related services.  From an industry perspective, networking platforms account for approximately 80% of revenue.
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When analyzing the fundamentals, gross margin is incrementally increasing, but there are a few negative indicators who look out for.  ROA from the firm went from 36.93 to -8.94 between 2017 to 2018, respectively.  The EBITDA for the company are also another warning indicator for the optimistic investor, as the values show a consistent and exponential decrease as follows:

From looking that the firm’s 1-Year chart, we can see that the stock’s annual growth percentage was 64.25%, with its biggest percentage decrease in late August of 2018 which resulted in a 9.67% decline.  Due to many other tech stocks rising and falling repeatedly throughout 2018, , Ciena offers the investor a higher level of stability.

​When analyzing the fundamentals, gross margin is incrementally increasing, but there are a few negative indicators who look out for.  ROA from the firm went from 36.93 to -8.94 between 2017 to 2018, respectively.  The EBITDA for the company are also another warning indicator for the optimistic investor, as the values show a consistent and exponential decrease as follows:

For the investors who are just starting out in researching the financial markets for a few good stocks, it’s important to find congruent increasing values in EBITDA, as this indicator partially reflects the overall performance in a firm, excluding property, plant, and equipment.
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For a free consultation on how to trade stocks in times of uncertainty, contact Michael V. Blumeyer at (858) 699-0899 or at Michael.blumeyer@pepperdine.edu