Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, network equipment maker Tellabs (Nasdaq: TLAB ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Tellabs' business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Naperville, Ill. (1974)|
|Market Cap||$1.49 billion|
|Trailing-12-Month Revenue||$1.38 billion|
|Management||Founder/Chairman Michael Birck
President/CEO Robert Pullen
|Return on Equity (Average, Past 3 Years)||1.6%|
|Cash/Debt||$1.19 billion / $164 million|
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 90% of the 445 members who have rated Tellabs believe the stock will outperform the S&P 500 going forward.
[A]t the current price it looks very attractive. The company has $1.2 billion in cash and short-term investments and only a small amount of debt. The five year average free cash flow is over $160 million. The company has decent profit margins and return on capital. The main question here is what will they do with all that cash? A special dividend is a definite possibility.
But before you run out and start gobbling up shares, some of Tellabs' peers might actually be better suited to your own individual investing profile.
For example, Cisco Systems' (Nasdaq: CSCO ) greater size and returns on equity of 13.8% dwarf smaller Tellabs', so Cisco's a much better play for conservative large-cap investors. Meanwhile, Qualcomm (Nasdaq: QCOM ) is expected to grow its bottom line at a faster rate of 16% over the next five years, giving growth seekers a superior option over Tellabs' expected 8% growth. And Motorola Solutions' (NYSE: MSI ) shares have rallied nicely over the past few months, jumping 12% since late September, which naturally gives momentum traders a better opportunity than Tellabs, with its small decline. However, when you consider that Tellabs trades at a clear price-to-book of 0.9, a discount to each of its peers mentioned above, the stock seems nicely suited for contrarian bargain hunters looking to buy into the space.
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