4-Star Stocks Poised to Pop: Opnext

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, optical networking equipment supplier Opnext (Nasdaq: OPXT) has earned a respected four-star ranking.

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

Opnext facts

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 218 members who have rated Opnext believe the stock will outperform the S&P 500 going forward. These bulls include 19Patrick58 and All-Star hedgemore, who is ranked in the top 15% of our community.

Two months ago, 19Patrick58 tapped Opnext as a particularly tasty takeover target: "I like a risk, but there doesn't seem that much downside; either they will take off, or they will be acquired by a larger firm, like Cisco. Either way, it's all good."

In fact, Opnext currently trades a cheapish price-to-sales ratio of 0.6. That represents a clear discount to listed rivals Finisar (2.6), JDS Uniphase (3.1), and Oclaro (1.2).

CAPS All-Star hedgemore elaborates on the bargain opportunity:

A lot of people look like they got burned on this recently buying into the good 4th quarter 2010 results. Then this stock got dumped by profit takers and the fact that the sector seems to be over filled with inventory for the next few months (until July or August 2011). But the stock is at reasonable levels again and it is a good time to accumulate and get in.

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