5-Star Stocks Poised to Pop: Infinera

• Email
• Share
• Print

Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, optical networking company Infinera (Nasdaq: INFN) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Infinera's business, and see what CAPS investors are saying about the stock right now.

Infinera facts

Headquarters (founded)	Sunnyvale, Calif. (2000)
Market Cap	$785.1 million
Industry	Communications Equipment
TTM Revenue	$447.5 million
Management	Co-Founder/CEO Jagdeep Singh Co-Founder/Chief Technology Officer Drew Perkins
Compound Annual Revenue Growth (over last two years)	106.7%
Competitors	Cisco Systems (Nasdaq: CSCO) QUALCOMM (Nasdaq: QCOM) Alcatel-Lucent (NYSE: ALU)
CAPS members bullish on INFN also bullish on	Cemex (NYSE: CX)
CAPS members bearish on INFN also bearish on	General Motors (NYSE: GM) Ford Motor (NYSE: F)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 1,019 of the 1,040 members who have rated Infinera -- some 98% -- believe the stock will outperform the S&P 500 going forward. These bulls include Northville and All-Star Babachrono, who is ranked in the top 2% of our community.

In late February, Northville wrote that Infinera "is on the cutting edge of the most recent optical network communications and has a large technology lead over its competitors, as evidenced by it winning more and more network contracts." Our CAPS member concludes: "Couple this with a strong balance sheet, which includes a lot of cash and no debt and what we have here is a small-cap that is going to be volatile, but headed way up."

In a pitch from late last month, Babachrono urged our community to take advantage of Infinera's lumpy and, most importantly, misunderstood model:

Taking top accounts from their competitors at a good pace shows they are a company to be reckoned with in the industry. ...

A key point of their company is to realize that they take a profit hit when they add a new customer, the large amount of common equipment to go into a new customer is at a very low margin, plus discounts lower it even further. However, as the company expands, all they have to do is plug in modules, and these modules are at a very high margin. ... Short-term this company will take a hit, buy in here, if it falls back up the truck, over the long term this company has a genius business model and is only going up.

What do you think about Infinera, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.