UTStarcom Shares Plunged: What You Need to Know (CSCO, UTSI)

UTStarcom Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese networking equipment maker UTStarcom (Nasdaq: UTSI ) fell by as much as 14% earlier today after the company lowered its full-year revenue target from $325 million to a range of $278 million to $280 million.

So What: UTStarcom is going backwards just as many Chinese stocks are experiencing massive revenue growth. In networking equipment, Cisco (Nasdaq: CSCO ) has improved sales by 10.9% over the past year. Juniper Networks (Nasdaq: JNPR ) has grown sales by 16.6% over the same period. UTStarcom is now on pace for its revenue to decline by at least 27%.

Now What: Let this be a lesson. While many China-based stocks are ready to pop, not every Chinese stock is worth your investment dollars. In UTStarcom's case, a history of negative returns on capital and declining revenue should tell you all you need to know.

Interested in more info on UTStarcom? Add it to your watchlist by clicking here.

The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, "I will spend my last dying breath... and every penny of Apple's $40 billion in the bank to right this wrong." What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool has written a bull call spread in Cisco and is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.