Why We're Buying (More) Infinera

The following video is part of our “Motley Fool Conversations” series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.

It seems as though investor patience is wearing thin for Infinera, and the stock price has fallen. John and David will use this opportunity to buy some additional shares for their real-money portfolio. Data usage is growing exponentially, and Infinera sells optical networking equipment that will help network operators meet the upcoming challenges. Unlike competitors Ciena and Alcatel-Lucent, Infinera uses photonic integrated circuits to reduce power consumption and space requirements. The company continues to attract customers for its latest generation product, the DTN-X. It wants to land a big Tier 1 customer like Verizon. With about $200 million in cash on its balance sheet and the next phase of growth on its way, Infinera shares look very attractive today. There’s been a rumor going around that Cisco might want to buy the company, but that’s not likely. Infinera has a solid future ahead of it, which is why John and David are buying more shares for their portfolio.


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David Meier owns shares of Infinera. John Reeves owns shares of Verizon Communications. The Motley Fool owns shares of Infinera. Motley Fool newsletter services recommend Infinera . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (9)

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 Report this Comment icon found on every comment.

  • Report this Comment On October 21, 2012, at 10:24 AM, Nolte808 wrote:

    I appreciate the bullish thesis as well as the candor and humor the authors bring to this lagging pick. However, their case would be better served if they also addressed many of the non-technical hurdles INFN faces as per the MF blog post on INFN on 9/14/12. I appreciate MF having opposing points of view, and I can't up my current grubstake in INFN until I feel I have more visibility on the obstacles to uptake INFN faces, regardless of its technical superiority. We'll see if my uncertainty costs me or saves me further losses.

  • Report this Comment On October 23, 2012, at 2:28 PM, Nailpick wrote:

    Averaging down...

  • Report this Comment On October 24, 2012, at 11:22 AM, dwscho wrote:

    We have been hearing for years about the technological advantage INFN has and how it's only a matter of time until it breaks out as a major disruptive force in the industry. Unfortunately, the stock price doesn't reflect that notion. I for one am feeling like this "dog ain't going to ever hunt" and I am about to retire it to the bin of junk stock ideas.

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