Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. Investors have cooled on many stocks lately, but many believe that storage networking firm Brocade Communications Systems (Nasdaq: BRCD ) is worth a look.
In our Motley Fool CAPS community, 93% of the 624 investors rating the company are bullish, so there's no shortage of reasons why Brocade will thrive, three of which I've highlighted below.
But here at The Motley Fool, we're all for looking at both the good and bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below, or rate Brocade in CAPS.
1. Foundry Networks integration
Although some investors were disappointed that Brocade wasn't in 3Com's (Nasdaq: COMS ) position as a Hewlett-Packard (NYSE: HPQ ) takeover target, the successful integration that Brocade has made with its own acquisition of Foundry Networks has helped assuage the pessimism. The acquisition has helped boost revenue in recent quarters and could help position the company well in a market with fierce competitors like Cisco (Nasdaq: CSCO ) and Juniper Networks (NYSE: JNPR ) .
2. Tech rebound
While large companies like Cisco and IBM (NYSE: IBM ) have reported increasing business in their recent quarters, smaller players like Emulex and Atheros (Nasdaq: ATHR ) have also reported solid results, leading many investors to believe that -- despite the weak economy -- there is underlying strength in the technology sector. With improving results coming from a number of sectors in the tech industry, many investors like the way things are lining up in Brocade's favor.
3. Positive outlook
A solid following of CAPS members aren't the only ones with a bullish outlook for Brocade. Moody's recently raised its outlook for the company to positive, as it sees a more stable business today following the Foundry Networks integration. The ratings service also looks favorably on the moves the company has made to improve its liquidity and financial situation and forecasts strong demand for Brocade's products going forward.