Stock Analysis of Ciena Corp.
Thank you for requesting an analysis of Ciena Corp. from VectorVest ProGraphics. The ticker symbol for Ciena Corp. is CIEN.
CIEN is traded on the NASDAQ and options are available on this stock.
PRICE: CIEN closed on 25-Feb-1998 at $40.40 per share.
VALUE: CIEN has a Value of $54.30 per share. Value is the foundation of the VectorVest system.It is a measure of what a stock
is currently worth. Value is based upon earnings, earnings growth rate, dividend payments, dividend growth rate, and financial
performance. Current interest and inflation rates also play an important role in the computation of Value. When interest and/or
inflation rates decrease, Value goes up. When interest rates and inflation increase, Value goes down. Sooner or later a stock's Price
and Value always converge.
RV (Relative Value): CIEN has an RV of 1.71. On a scale of 0.00 to 2.00, an RV of 1.71 is excellent. RV reflects the long-term
price appreciation potential of the stock compared to an alternative investment in AAA Corporate Bonds. Stocks with RV ratings
above 1.00 have attractive upside potential. A stock will have an RV greater than 1.00 when its Value is greater than Price, and its
Relative Safety (see below) and forecasted earnings growth rate are above average. In some cases, however, a stock's RV will be
above 1.00 even though its Value is well below Price. This happens when a stock has an exemplary record of financial
performance and an above average earnings growth rate. In this case, the stock is currently selling at a premium, and the investor
is banking on future earnings growth to drive the stock's price higher. This information is very useful not only in knowing
whether or not a stock has favorable price appreciation potential, but it also solves the riddle of whether to buy high growth, high
P/E, or low growth, low P/E stocks.
We believe that RV ratings above 1.00 are required to consistently achieve above average capital gains in the stock market.
RS (Relative Safety): CIEN has an RS rating of 0.88. On a scale of 0.00 to 2.00, an RS of 0.88 is poor. VectorVest looks at
safety from the viewpoint of an equity investor (one who is buying stock of a company) rather than that of a purchaser of debt
(one who is lending money to the company). From this perspective, consistency of financial and operating performance, stock
price appreciation history, and price volatility are the key factors used in the evaluation of Relative Safety (RS). Debt to equity
ratio, capitalization, sales volume, business longevity and other factors are also considered, but to a lesser degree.
VectorVest favors steady, predictable performers. All stocks are rated on a scale of 0.00 to 2.00. A stock with an RS greater than
1.00 is safer and more predictable than the average of all stocks. A stock with an RS less than 1.00 is less predictable and riskier
than the average stock.
RT (Relative Timing): CIEN has an RT rating of 0.52. On a scale of 0.00 to 2.00, an RT of 0.52 is poor. RT is a fast, responsive,
short-term price trend indicator. It analyzes the direction, magnitude, and dynamics of a stock's price behavior over the last 13
weeks; then reflects and projects the short-term price performance of the stock. Once a stock's Price has established a strong trend,
it is expected to continue that trend for the short-term. If the trend dissipates, RT will gravitate towards 1.00. Should the price
change dramatically, RT will notice the crucial turning point. When warranted, it will explode from a Price low and dive from a
Price high.
All stocks are rated on a scale of 0.00 to 2.00. If RT is above 1.00,the stock's Price is in an uptrend. Below 1.00, the stock's Price
is in a downtrend.
VST-Vector (VST): CIEN has a VST-Vector rating of 1.11. On a scale of 0.00 to 2.00, an VST of 1.11 is good. VST-Vector
solves the dilemma of balancing Value, Safety and Timing. Stocks with high RV values often have low RS values, or stocks
withlow RV and RS values have high RT's. How can we find the stocks with the best combinations of Value, Safety, and Timing?
The classic vector formula (square root of the sum of the squares) handles this problem. It combines a set of forces into a single
indicator for ranking every stock in the VectorVest database. Stocks with the highest VST-Vector have the best combinations of
Value, Safety and Timing. These are the ones to own for above average capital application.
GRT (Growth Rate): CIEN has a GRT of 53 % per year. This is excellent. GRT stands for forecasted Earnings Growth Rate in
percent per year. GRT is updated each week for every stock. Watch GRT trends very carefully. If the GRT trend is up, the stock's
Price will likely rise. If the GRT trend is down, the stock's Price will increase more slowly, cease to increase, or subsequently fall.
Recommendation (REC): CIEN has a Sell recommendation. REC reflects the cumulative effect of all the VectorVest parameters
working together. These parameters are designed to help investors buy safe, undervalued stocks which are rising in price, and to
avoid or sell risky, overvalued stocks which are falling in price.
VectorVest is tuned to give an "H" or "B" signal when a stock's price is approximately 10% above a recent low, and an "S" signal
when the stock's price is approximately 10% below a recent high. High RV, RS stocks are favored toward receiving "B" REC's,
and sheltered from receiving "S" RECs.
STOP-PRICE: CIEN has a Stop-Price of$ 42.10 per share. This is $1.70 or4.2% aboveits current closing Price. VectorVest
analyzes over 6,000 stocks each day for Value, Safety and Timing, and calculates a Stop-Price for each stock. These Stop-Prices
are based upon 13 week moving averages of closing prices, and are fine-tuned according to each stock's fundamentals.
In the VectorVest system, a stock gets a "B" or an "H" recommendation if its price is above its Stop-Price, and an "S"
recommendation if its price is below its Stop-Price.
DIV (Dividend): CIEN does not pay a dividend. VectorVest focuses on annual, regular, cash dividends indicated by the most
recent disbursement. Special distributions, one-time payments, stock dividends, etc., generally are not included in Dividend (DIV).
DY (Dividend Yield): CIEN has a DY of 0.0 percent. This is below the current market average of 1.3 percent. DY equals 100 x
(DIV/PRICE), and is expressed as a percentage.
EY (Earnings Yield): CIEN has an EY of 3.84%. This is below the current market average of 5.06%. EY equals 100 x
(EARNINGS PER SHARE/PRICE), and is expressed as a percentage.
EPS (Earnings Per Share): CIEN has an EPS of $1.55 per share. EPS stands for leading 12 months Earnings Per Share.
VectorVest determines this forecast from a combination of recent earnings performance and traditional fiscal and/or calendar year
earnings forecasts.
P/E (Price to Earnings Ratio): CIENhas a P/E ratio of 26.07. This ratio is computed daily based upon Price and EPS. P/E =
Price/EPS.
GPE (Growth to P/E Ratio): CIEN has a GPE of 2.03. This ratio suggests that This ratio suggests that CIEN is undervalued.
Growth to P/E ratio is a popular measure of stockvaluation which compares Earnings Growth Rate (GRT) to Price Earnings ratio
(P/E). A stock is considered to be undervalued when GPE isgreater than 1.00, and vice-versa. VectorVest believes that RV is a
much better indicator of long-term value. The RV of 1.71 for CIEN is excellent.
DS (Dividend Safety): CIEN has a DS of 0. On a scale of 0 to 99, a DS of 0 is poor. DS is defined as the assurance that regular
cash dividends will be declared and paid at current or at higher rates for the foreseeable future. Stocks with DS values above 50 on
a scale of 0 to 99 areabove average in safety.
RISK (Dividend Risk): CIEN does not pay a dividend. All stocks in the VectorVest system that pay dividends are classified as
having Low, Medium or High Dividend Risk (RISK). Stocks with DS values above 50 are above average in safety. These stocks are
classified as having LOW or MEDIUM RISK. Stocks with DS values below 50 are below average in safety and are classified as
having HIGH Risk.
DG (Dividend Growth): CIEN has a DG of 0 percent per year. Dividend Growth is a subtle yet important indicator of a
company's historical financial performance and the board's current outlook on the future use of funds.
YSG-VECTOR (Yield-Safety-Growth Vector): CIEN has a YSG-Vector of 0.00. On a scale of 0.00 to 2.00, an YSG-Vector
rating of 0.00 is very poor. VectorVest combines Dividend YIELD, SAFETY and GROWTH into a single parameter. YSG-Vector
allows direct comparison of all dividend paying stocks. Stocks with the highest YSG-Vector values have the best combinations of
Dividend Yield, Safety and Growth. These are the stocks to buy for above average current income and long-term growth.
VOL(100)s: CIEN traded 6073200 shares on 25-Feb-1998.
AVG VOL(100)s: CIEN has an Average Volume of 2747812. Average Volume is 50 day moving average of daily volume as
computed by VectorVest.
% VOL: CIEN had a Volume change of 121.0% from its 50 day moving average volume.
OPEN: CIEN opened trading at $39.30 per share on 25-Feb-1998.
HIGH: CIEN traded at a high of $41.30 per share on 25-Feb-1998.
LOW: CIEN traded at a low of $38.60 per share on 25-Feb-1998.
CLOSE: CIEN Closed trading at $40.40 per share on 25-Feb-1998.
% PRC: CIEN showed a Price change of 6.6% from the prior day's closing price.
INDUSTRY: CIEN has been assigned to the Telecomm (Equipment) Group. VectorVest classifies stocks into over 190 Industry
Groups and 50 Business Sectors.
CIEN has below average safety with well above average upside potential. It reflects a stock which is likely to give well above
average,inconsistent returns over the long term.
The basic strategy of VectorVest is to buy low risk, high reward stocks. We suggest that Prudent investors buy enough high
Relative Value, high Relative Safety stocks to keep the overall RV and RS ratings of their portfolios above 1.00. As you do this,
you'll find that your risk will go down and your investment performance will improve. Not a bad combination. |
