When I wrote up Brocade (NASDAQ:BRCD) as a Top Pick in mid-August, a lot of my thesis was predicated on the Street underestimating the company's ability to cut costs and overestimating the threats to the company's SAN business. So far, that thesis is working as the shares are up more than 20% since that pick (versus approximately 15% and 8% moves for the S&P 500 and Nasdaq). I do believe that there are very relevant long-term concerns about Brocade's core SAN switch business, but even modest growth expectations support a fair value closer to $11 today.
Better Than Expected Results, But Not Good Enough To Settle Anything
Brocade reported that sales fell 4% for the fiscal first quarter,...
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