ADC Telecommunications: Finding Growth Opportunities in China

May.26.10 | About: ADC Telecommunications (ADCT)

We have noticed all the new contracts ADC Telecommunications (ADCT) has signed via their Network Solutions division in the Chinese markets. ADC Telecommunications is a leading global supplier of broadband network equipment, fiber optics, software and systems integration services that enable communications service providers to deliver high-speed Internet, data, video and voice services to consumers and businesses worldwide.

Analysts on Wall Street have noticed this stock and have given their clients 7 buy and 7 hold recommendations. Although they estimate that sales will only increase by 6% next year they are predicting increases in earnings per share of 42.90% next year and a 5-year annual compounded growth rate of 11.83% -- double digits are good!

Investor sentiment is positive with the CAPS members on Motley Fool voting that the stock will beat the market 332 to 31 with the more experienced All Stars agreeing 112 to 5. Of the Wall Street columnists Fool follows, their articles have been positive, 14 to 0.

The real story has been in the stock's recent price momentum, up in 4 of the last 5 sessions for a 17.01% gain in only 5 days. Barchart's 13 technical indicators have 10 of 13 possible buy signals for a 72% technical buy score. The stock trades around 8.37 with a 50 day moving average of 7.83.

A momentum investment play with:

  • Recent upward price momentum of 17.01% in a week
  • Wall Street predicting increases in sales and earnings
  • Positive Investor sentiment

Disclosure: No positions in ADCT at the time of publication