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Antonio Pedra
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  • Procera Networks (PKT) 0 comments
    Nov 24, 2012 6:38 AM | about stocks: PKT

    Procera Networks is a company dedicated to providing solutions to broadband services providers. In fact it is a global provider of infrastructure equipment service management, control and identification of network traffic, creator of the devices 'PacketLogic', the most accurate identification application of the market, by employing the identification connection engine DRDL (Datastream Recognition Definition Language).

    Procera is a young company, founded in 2002 and listed since 2003, but it's also relatively small, with $470 M capitalization. Its results didn't became interesting until 2010 when its growth began to be exceptional. Let's see it's latest quarterly changes, old to new.

    EPS: -58%, +108%, +225%, +667%, +200%, +1000%

    Sales: -20%, +110%, +102%, 157%, 108%, 78%.

    In addition, its debt is small, its ROE is 15%, and has doubled the number of funds invested in it in the last year (from 58 to 113). Moreover, the management team owns 5% of the company, which is not bad, although since being such a young company i would have expected a higher number. Finally its operating cash flow was in clear upward trend.

    At technical level, we can see that its first step in the market was like a 'hot IPO', and that also had a second golden age in 2007. More recently it's stocks had a nice upward movement in 2011 and 2012, and since April, started building a base, that failed with a kind of a double top in July. Since then it has moved sideways, and even new S&P 500 new highs for new QE announcement was not enough for Procera making new price increase. In November, its movement has turned even more dangerous with the general market declining. For my taste, I would prefer the stock to gain a little bit of relative performance strengh before trying to invest in it. However, it would be also positive to see bull signs in the S&P also.

    To sum up, and although it seems to be an stock for the future, it would be wise to wait for positive signs in the stock performance while waiting for continuing with its EPS growth.
    (click to enlarge)

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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