Ceragon Networks (CRNT)

Hey everyone thanks for reading my blog. I hope everyone had a good weekend.

Today I am going to be talking about Ceragon Networks a company I found while checking for stocks in a strong uptrend. Ceragon is supposed to report earning for there 3rd quarter on October 22. Earning per share is estimated to come in at $0.12 a share from $0.11 in 2006.

What do they do?
Ceragon Networks Ltd. (Ceragon) design, develops, manufactures and sells high-capacity, point-to-point wireless backhaul solutions. The Company’s products are used primarily by cellular operators to transport voice and data traffic in the backhaul, the segment of the telecommunications network that connects base stations to switch locations on the core network. Its products are also used by other telecommunications service providers that operate wired or wireless networks, and by organizations and enterprises that operate their own private networks based primarily on synchronous digital hierarchy/synchronous optical network technologies (SDH/SONET )and Internet protocol (IP) technologies.

Fundamental Quality?
I like to rate stocks on 3 different components, the first being fundamental strength. To start off I want to warn you, this company is not profitable yet and is highly volatile. This being the case it may be more speculative than past company's I have talked about. However I do feel this company has a ton of upside potential. First thing that strikes my eye is that return on investment has been cut from -9.7 at the end of 2006, to -1.8 for the trailing twelve months. We see a similar increase with there return on assets, at the end of 2006 it was at -6.4 and for the trailing twelve months its up to -1.2. Also sales have increased from 18.4 million in 2002, to 134.7 million in the trailing twelve months. Sales have increased every year.

Current Operational Trends
The second category I like to rate a stock on is what I like to call Current Operational Trends. Or more simply, how strong is a company's most recent sales and EPS growth.
One way to gauge this is by using the sales growth for the most recent quarter. For Ceragon its 57.9% compared to its peers in the industry there's is 85% higher. I also like to look at the EPS growth for the most recent quarter. For Ceragon its 217.2% which is 91% more than other company's in there industry.

Technical Strength
The final aspect of a stock I like to look at is, Technical Strength.

Taking a look at the chart we can see this stock just broke through resistance to set a new 52 week high. Both the 50 and 200 day moving averages are up and volume is up over the most recent breakout. Both the RSI and MACD are both trending upwards and I see no weakness in the charts, even after such a long and steep trend.

Based on the fundamental and technical strengh of this stock I am rating it a buy.

This Stock (CRNT) Is Rated A Buy