Tech Stocks to Buy: Ciena (CIEN)
Forward P/E Ratio: 12
YTD Performance: 7.3%
The optical networking sector is out of favor. Concerns over a drop in spending from telecoms in China are hurting Oclaro, Inc. (NASDAQ:OCLR) and Acacia Communications, Inc. (NASDAQ:ACIA). But Ciena Corporation (NYSE:CIEN) is holding up relatively well in the sector.
Still, at a forward P/E of 12, Ciena often comes back with a better quarter after reporting a poor one. In the first quarter, Ciena reported weakness in its Global Services unit, where revenue fell 18% sequentially. As often the case, Ciena will fix its misstep with that unit and may beat expectations when it reports results in June.
As Ciena works out ways in strengthening its operational efficiency, expect contract wins with Tier-1 companies and deals in India adding positively to the company’s prospects this year.